Forget VYM: International Dividend ETF IDV Has Gained 26.86% vs 15.53% This Year
Most dividend investors default to VYM without questioning whether the default actually delivers the best income. One international rival has quietly built a performance gap that deserves a serious look before your next allocation decision.
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If you own the Vanguard High Dividend Yield ETF (NYSEARCA:VYM), you hold the default choice for U.S. dividend income, and it has earned that status. VYM spreads money across hundreds of large American dividend payers and held $94.6 billion in net assets as of April 30, 2026. It rose 15.53% over the year ended September 25, 2026. Over the same stretch, the iShares International Select Dividend ETF (CBOE:IDV) gained 26.86%. Both figures include distributions. VYM is a sound fund, but the question is whether the default deserves your entire income allocation.
Why VYM Remains a Solid Core Holding
VYM gives you familiar U.S. names with broad sector coverage. Broadcom is its largest position at roughly 8% of assets, followed by JPMorgan at 3.34% and Exxon Mobil at 2.72%. That tech tilt has helped. Over ten years, VYM’s price rose 196.98% versus 162.27% for IDV. Anyone claiming international dividends always win is discounting that record.
The recent picture has changed, though. Over five years, IDV’s price rose 92.63% against 73.66% for VYM, and IDV also leads year-to-date, 14.31% to 11.82%.
Why Overseas Companies Hand Back More Cash
IDV owns dividend payers in developed markets outside the U.S., typically tilted toward Europe, the UK, and Asia-Pacific financials, utilities, and energy names. Payout culture is different there. American boards lean heavily on buybacks, which lift earnings per share and give management flexibility. Many European and Asian companies instead distribute a fixed share of annual profits as cash, a convention shaped by shareholder expectations and, historically, tighter buyback rules. For a U.S. investor, that means a larger slice of corporate earnings arrives as dividends rather than as share-count reduction.
Rising Payments, Measured in Dollars
As of the market close on September 25, 2026, IDV traded at $43.25 and VYM at $157.68. VYM’s latest distribution was $0.8869 per share, with a trailing twelve-month total of $3.6755. IDV paid $0.5298 most recently and $2.424309 over twelve months.
The growth trend favors IDV. Its June payment rose to $1.101643 from $0.787115 a year earlier, and its September payment rose to $0.5298 from $0.382058. VYM’s September check also grew to $0.8869 from $0.8417, a steadier climb.
Uneven Checks and Withholding Taxes Come With IDV
VYM’s recent quarterly payments stayed between $0.8417 and $0.9795. IDV swings hard. This year it paid $0.200945 in March, $1.101643 in June, and $0.5298 in September. Many foreign companies pay once or twice a year, often after spring shareholder meetings, so cash clusters in certain quarters. A retiree budgeting quarter by quarter could receive a large annual total and still come up short in March.
Foreign governments also generally withhold tax on dividends at the source, reducing what reaches you. In a taxable account, the foreign tax credit may recover some of it; inside an IRA, that withheld amount is typically lost. IDV also charges 0.50% annually per its August 31, 2026 prospectus, and adds currency risk.
Both Funds Slipped Over the Past Month
Both IDV and VYM have pulled back recently. IDV fell 2.59% over the past month, while VYM dropped 3.9%. Over the past week, they moved nearly in tandem: IDV down 1.01%, VYM down 0.99%.
Adding IDV Without Triggering a Tax Bill
Selling appreciated VYM shares outside a retirement account can create capital gains. Cleaner paths exist: direct new contributions and reinvested VYM dividends into IDV, or rebalance inside a tax-deferred account where sales carry no immediate tax. For a shot at the foreign tax credit, keep IDV in a taxable brokerage account. Most investors will find a partial allocation, rather than a full swap, captures the diversification benefit.
Who Should Add IDV and Who Should Stick With VYM
If you depend on level, predictable quarterly checks to pay bills, keep VYM as your income engine and think hard before switching. IDV’s March payment alone shows the risk. If you measure income as a total annual stream and want exposure beyond U.S. borders, IDV makes a strong case for a meaningful slice of your income portfolio. A turnaround in overseas payout growth or a sustained dollar rally would weaken that case, so review the allocation each year.
Contact [email protected] for any questions or corrections.
Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
