Small Investments, Big Wealth Potential
For many new and seasoned investors alike, the idea of building wealth often feels tied to needing thousands of dollars upfront. But the truth is, even $100 can be a powerful first step toward financial freedom if invested wisely. With the rise of exchange-traded funds (ETFs), investors now have affordable access to diversified portfolios spanning global markets, dividend-paying companies, and industry leaders.
If you’re seeking passive income through dividends while keeping your investment diversified, one ETF stands out: the Vanguard International High Dividend Yield ETF (NASDAQ: VYMI). With its affordable price (under $100 per share) and global reach, this ETF offers a balance of income, diversification, and long-term growth potential.
Why Choose an ETF Instead of a Single Stock?
Investing in individual stocks can be rewarding, but it also comes with concentrated risk. Buying a single company like Apple, Tesla, or Nestlé means your returns depend heavily on that one business. In contrast, ETFs allow you to spread your risk across hundreds or even thousands of companies, giving you broad exposure to global markets.
For just $100, you can buy a share of VYMI and instantly own a piece of nearly 1,600 international dividend-paying stocks. This makes it one of the most diverse income-focused ETFs available today.
What Is the Vanguard International High Dividend Yield ETF?
As its name suggests, VYMI invests in high-yield dividend stocks outside the United States. It tracks the FTSE All-World ex-U.S. High Dividend Yield Index, which focuses on stable, dividend-paying companies across developed and emerging markets.
Key Features of VYMI:
- Nearly 1,600 stocks spread across Europe, Asia-Pacific, and emerging markets.
- Largest holdings: Nestlé, Roche, HSBC — all under 1.5% of the portfolio, ensuring no single company dominates.
- Geographic distribution: 44% Europe, 26% Pacific, 22% Emerging Markets.
- Dividend yield: ~4%, significantly higher than the S&P 500 average of ~1.25%.
Why Dividends Matter for Investors
Dividends provide steady cash flow, making them ideal for both retirees and younger investors seeking reinvestment opportunities. By reinvesting dividends, investors can accelerate compounding returns, turning small contributions into significant wealth over decades.
High-dividend ETFs like VYMI are particularly attractive because:
- They provide passive income regardless of market fluctuations.
- They offer exposure to mature, stable companies often overlooked by growth-focused investors.
- They can act as a hedge during volatile markets, where income becomes more reliable than uncertain price appreciation.
Risks and Considerations of VYMI
While dividend stocks are often seen as low-risk, there are unique challenges with international high-yield ETFs:
- Currency fluctuations: Returns may be impacted by exchange rate changes.
- Regulatory differences: Global markets operate under varying laws that may affect shareholder rights.
- High-yield traps: Companies with unusually high dividends sometimes face financial stress.
Still, by owning nearly 1,600 companies, VYMI greatly reduces the risk of any single failure damaging overall performance.
Low Costs, Big Advantage
Vanguard has a reputation for ultra-low expense ratios, which means more of your money stays invested.
- Expense ratio: 0.17% — higher than some U.S.-focused Vanguard ETFs, but still far lower than the industry average of 0.96%.
This low-cost structure, combined with passive indexing, makes VYMI a long-term winner for dividend investors.
Performance: Beating the Odds
Despite being a dividend-focused ETF, VYMI has also delivered impressive capital appreciation:
- 2025 Year-to-Date Gain: +26.6% (best among Vanguard ETFs this year).
- 5-Year Annualized Return: 14.2% (slightly below the S&P 500’s 14.7%, but with a much higher dividend yield).
This performance demonstrates that income investors don’t need to sacrifice growth to achieve steady returns.
Copiable Table: Vanguard VYMI Snapshot
| Feature | Details |
|---|---|
| Ticker | VYMI |
| Index Tracked | FTSE All-World ex-U.S. High Dividend Yield |
| Holdings | ~1,600 |
| Largest Holdings | Nestlé, Roche, HSBC |
| Geographic Allocation | 44% Europe, 26% Pacific, 22% Emerging Markets |
| Dividend Yield | ~4% |
| Expense Ratio | 0.17% |
| 5-Year Annualized Return | 14.2% |
| YTD Performance (2025) | +26.6% |
Final Thoughts: Why $100 in VYMI Is a Smart Buy
For investors seeking a low-cost, high-dividend ETF with global diversification, the Vanguard International High Dividend Yield ETF (VYMI) is an excellent choice. With nearly 1,600 holdings, a strong dividend yield, and proven performance, it provides a solid foundation for long-term wealth building.
Whether you’re just starting with $100 or adding to an established portfolio, VYMI combines safety, income, and growth in a way few ETFs can match. In uncertain markets, owning high-quality dividend payers across the globe could be one of the smartest moves you make.
Reference : Jennifer Saibil