Vanguard launches international high dividend yield ETF on Toronto Stock Exchange

Aug 30th, 2018 | By | Category: Equities

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Investment giant Vanguard has launched the Vanguard FTSE Developed ex North America High Dividend Yield Index ETF (VIDY CN) on Toronto Stock Exchange.

Vanguard Canada International High Yield Index ETF

Vanguard’s latest Toronto-listed ETF provides access to dividend-payers outside of North America.

The fund may appeal to yield-hungry investors looking for equity income from a portfolio of developed market stocks excluding the US and Canada.

“Canadian investors and advisors are increasingly looking for global income-oriented solutions,” said Atul Tiwari, Managing Director of Vanguard Investments Canada.

“This ETF helps meet that need with an easy-to-understand investment process featuring strong equity yield potential with low-costs and a disciplined risk management framework.”

The ETF tracks the FTSE Developed ex-North America High Dividend Yield Index which is derived from the FTSE All-World High Yield Index. This parent index consists of common stocks of large- and mid-cap companies characterized by high dividend yields. REITs and similar real estate companies are not included in the index, and all common stocks that are not expected to pay a dividend over the following twelve months are also excluded.

The methodology then ranks all remaining stocks by forecast dividend yield. The parent index aims to contain the highest yielding stocks accounting for 50% of the investable market capitalisation of the FTSE All-World Index.

The fund’s index contains all developed market stocks listed outside the US and Canada that are contained within the parent index. The index is weighted by market capitalization and reconstituted and rebalanced on an annual basis.

“We have seen that Canadian investors value equity income options that are low-cost, global and well-diversified,” said Tim Huver, Head of Product, Vanguard Investments Canada. “This ETF provides exposure to the largest high dividend-paying companies across a diversified mix of 23 developed international markets outside of North America.”

VIDY comes with a management fee of 0.28%. Income from portfolio holdings is distributed to investors on a quarterly schedule.

The ETF is the thirty-seventh addition to Vanguard Canada’s ETF suite.

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