VYMI Rides Rate Hike to Higher Ground

The Vanguard International High Dividend Yield ETF (VYMI) has proven resilient in an environment of rising interest rates, according to recent performance. Despite a tough setup due to US growth rebounding hard, VYMI delivered positive absolute returns and maintained its structural value rotation.

The Federal Reserve's rate hike was seen as confirmation of the 'higher-for-longer' scenario, which compresses long-duration US growth multiples while benefiting VYMI's short-duration value tilt. The ETF's heavy weighting in financials also contributed to this outcome.

Currency fluctuations had previously driven a lag in the S&P 500 index, but euro weakness has plateaued and the yen remains capped, easing this drag on VYMI's performance.