For millions of investors, the S&P 500 and total US market are the entire equity conversation. Vanguard S&P 500 ETF (NYSEARCA:VOO) and Vanguard Total Stock Market ETF (NYSEARCA:VTI) sit at the core of most set-and-forget portfolios. Beating the S&P 500 over any meaningful stretch is hard, and the graveyard of managers who tried is long. Yet in 2026, one Vanguard fund has quietly done it, without leverage, options overlays, or gimmicks. It simply points capital somewhere most US investors do not.
The Case for Looking Abroad
US valuations look stretched after another leg of the bull market, and the index is unusually concentrated in AI-linked names. Forward returns from here are likely more modest than the last five years suggest. Treating the S&P 500 as the entire investable universe is a bet that mega-cap tech keeps carrying the load forever. JP Morgan’s 2026 outlook pegs the US equity premium over international equities at 34% versus its 19% long-run average, with the dollar still roughly 10% overvalued. Owning non-US dividend payers as a complement to a US core is one of the cleaner ways to lean into that spread.
Enter the Vanguard International High Dividend Yield ETF
The fund is Vanguard International High Dividend Yield ETF (NASDAQ:VYMI). As of Aug. 12, 2026, VYMI is up 18.6% year to date against VOO’s 13.94%. VTI’s total return sits in a similar neighborhood to VOO. Over one year, VYMI has returned 30.16% versus VOO’s 21.63%. Over five years it has edged the S&P 500 fund, 90.34% to 85.92%.
VYMI closed at $104.35 against $708.42 for VOO. It carries a 0.07% expense ratio versus VOO’s 0.03%, sits on roughly $20 billion in net assets, and pays quarterly. Trailing 12-month distributions come to $3.6035 per share, with an annualized forward estimate of $5.0276, well ahead of what either US fund throws off.
The Ten-Year Reality Check
Over the last decade, VYMI has not beaten the US funds, and it is not close. As of Aug. 12, 2026, VYMI’s ten-year return is 179.58%. VOO’s is 317.68%. VTI’s is 240.8%. Anyone who owned the US funds ended up meaningfully wealthier than the diversifier. International value and high-dividend strategies spent much of the 2010s as dead money while US large-cap tech ran the table. The current cycle belongs to VYMI. The decade belongs to VOO and VTI. That tension is the actual decision.
Who Should Actually Care
VYMI works as a complement to a US core, not a replacement. It suits investors who want real income, geographic diversification, and exposure to markets trading at more reasonable multiples, and who can stomach stretches when the S&P 500 pulls away. Our prior VYMI coverage and dividend safety check walk through the case in more depth. If AI concentration in your VOO or VTI keeps you up at night, a measured VYMI sleeve is defensible. If multi-year lags rattle you, skip it.
The Verdict
The numbers as of Aug. 12, 2026 are what they are. VYMI is beating VOO and VTI this year, on one year, and over five, and it pays a much fatter distribution while doing it. The ten-year record still belongs to the US funds by a wide margin. Both are true. Size the position to fit that tension, not the headline you just read.
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