U.S. Stocks Struggle; International ETFs Present Opportunities

U.S. stocks have had a challenging start to 2025, with major indexes declining. Investors are encouraged to explore international ETFs like Vanguard Total International Stock ETF and Vanguard International High Dividend Yield ETF to diversify and hedge against market uncertainties.

Date: 11-03-2025

AI Rating: 5

Market Overview
2025 has begun on a rough note for U.S. stocks, with all three major indexes trending downward. The Nasdaq Composite, in particular, has seen a drop of 13.4% from its December highs. This decline incorporates many well-known stocks, suggesting a market-wide malaise.

Investment Strategies
During market downturns, investors may look for ways to hedge their portfolios. The highlighted ETFs - Vanguard Total International Stock ETF and Vanguard International High Dividend Yield ETF - offer opportunities for investing in a diverse array of international stocks. The rationale for diversifying internationally is primarily rooted in risk management.

Potential for Returns
The Vanguard Total International Stock ETF contains over 8,500 stocks, inherently providing a significant advantage in diversification. Developed and emerging markets are included, exposing investors to different growth potentials and stability factors in their investments.

Vanguard International High Dividend Yield ETF
For income-focused investors, the Vanguard International High Dividend Yield ETF presents an attractive proposition with an average yield of 4.4%, significantly higher than the S&P 500’s yield of about 1.3%. This could potentially provide a safety net for investors if stock prices stagnate or fall.

The current dividend payouts average around $0.82 per share, illustrating the ETF’s capability to offer returns through dividend distributions, albeit subject to fluctuation.

Stocks: VXUS VYMI