International stocks have long been out of favor and somewhat volatile, which has some investors skittish about venturing overseas. But a new actively managed fund focused on companies that are committed to raising their dividends may offer a more stable ride.
The Vanguard International Dividend Growth (VIDGX) launched in November. It's run by the same Wellington Management team that's behind Vanguard Dividend Growth (VDIGX), the longtime standout U.S. stock fund, and the two mutual funds share the same investment philosophy and approach. The new fund is designed, in fact, to be paired with the U.S.-focused Dividend Growth fund.
Homing in on dividend growth is a way to find superior businesses, says manager Peter Fisher, who as of the end of 2023 heads both Dividend Growth and International Dividend Growth. "Companies committed to paying and raising a dividend are disciplined about how they allocate capital," he says. "They tend to be less risky and less cyclical businesses, and they have clean balance sheets." The end result is a portfolio of high-quality companies that tends to do relatively well when markets are weak.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Fisher is not a new hand at foreign stock investing or dividend growth stock investing. He has been working with Wellington's dividend growth strategy team since 2012. And he has run a global dividend growth strategy since 2016, as well as an international dividend growth strategy since 2019, geared for both wealthy clients and institutional clients.
The fund, which charges a 0.54% expense ratio, is too new to talk about many specifics, including performance. But Fisher says the portfolio will hold about 40 stocks in well-known, multinational companies based in Europe, Japan, Hong Kong and Canada.
He expects the fund to yield roughly 3% and that companies in the portfolio will boast annual dividend increases of 10%, on average.
And there will be little turnover of names in the portfolio. "We're buying to own for the life of the fund," says Fisher. "We want to find businesses that we can be partners with and owners of for the long term." We'll be watching it carefully for now, until it has a longer track record.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
- Many Mutual Funds Are Converting To ETFs: What To Know
- What Are the Types of Mutual Funds?
- Vanguard ETFs vs Mutual Funds: Which Make for Better Investments?
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Financial Confidence? It's Just Good Planning, Boomers SayBaby Boomers may have hit the jackpot money-wise, but many attribute their wealth to financial planning and professional advice rather than good timing.
-
Gold Investments Continue to ShineHere are some of the best reasons why you should include at least a little gold in your portfolio.
-
The Pros and Cons of Investing in Private DebtWhat to know about investing in private debt, including how it works and where to invest.
-
Stocks and Funds for the Infrastructure Building BoomInvestors should consider buying these stocks and funds to make the most of the U.S. industrial renaissance.
-
Is Your Investment App Making You Trade Too Much?Investment app and website users are being warned to watch out for 'game-like' features that can encourage impulsive trading — and reduce long-term returns.
-
How to Hedge Against TariffsDonald Trump is expected to raise tariffs on imports in the coming months which could have a big impact on public companies. Here's how investors can prepare.
-
My Top 10 Stock Picks for 2025Each year, we ask an expert to pick 10 stocks that have the potential to beat the market over the next 12 months. Here are his choices for 2025.
-
Is a Lost Decade Ahead for Stocks?In the decade ahead for stocks, some Wall Street strategists foresee stagnant returns, but not all agree.
-
What You Need to Know About Working For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
