Three International Dividend ETFs Outperform S&P 500, Lag SCHD

Vanguard International High Dividend Yield ETF, iShares International Select Dividend ETF, and Schwab International Dividend Equity ETF each outpaced the S&P 500 index over the 12 months ending October 12, 2026, while delivering higher trailing yields than the Schwab U.S. Dividend Equity ETF. However, all three funds trailed the SCHD in total return for the same period.

According to data from The ETF Examiner, VYMI returned 24%, IDV returned 22%, and SCHY returned 18%, compared to an 18% return for the iShares Core S&P 500 ETF. In contrast, the SCHD returned 27% over the identical window. The trailing yields for the international funds were 3.7% for VYMI, 5.8% for IDV, and 3.7% for SCHY, exceeding the SCHD's trailing yield of 3.2%. Returns cited are total returns with distributions reinvested, and yields represent trailing 12-month payouts measured against closing prices on October 12, 2026.

VYMI tracks the FTSE All-World ex US High Dividend Yield Index, which includes large and midsize companies from developed and emerging markets outside the United States. The index weights holdings by market value and excludes real estate investment trusts. With a fee of 0.07% annually, VYMI offers broad international exposure with a focus on mature, profitable businesses.

IDV leads in income generation with a trailing yield of 5.8%. It tracks the Dow Jones EPAC Select Dividend Index, drawing from Europe, the Pacific, Asia, and Canada. The index screens for dividend history and sustainable payouts, then weights holdings by yield. IDV manages approximately $8.4 billion in assets and charges a 0.5% fee. Its top holdings include TotalEnergies at 5% of assets and British American Tobacco at 4%, alongside significant positions in European banks and energy producers.

SCHY follows the Dow Jones International Dividend 100 Index, applying a quality screen similar to that of its domestic counterpart. The index requires a long continuous dividend record and ranks companies based on cash flow relative to debt, return on equity, yield, and dividend growth. SCHY holds approximately $2.3 billion in assets and has trading data dating back to 2021. Its portfolio includes BHP, Eni, TotalEnergies, and Infosys, with significant exposure to developed and emerging markets outside Europe.

The performance divergence between these international funds and the SCHD is attributed to sector composition and payout structures. The international funds hold higher proportions of energy producers, banks, utilities, telecom carriers, and tobacco companies, which generate steady cash flow with lower reinvestment needs. The S&P 500 leans heavily on technology companies that retain earnings, resulting in a lower benchmark yield of 1.1%. Additionally, many European and Australian companies prioritize cash dividends over share repurchases, a practice less common among U.S. firms.

Investors in these funds face distinct risks related to currency fluctuations and foreign tax withholding. Returns are affected by exchange-rate moves between the U.S. dollar and local currencies such as the euro, pound sterling, Australian dollar, and Korean won. Foreign governments may withhold tax on dividends before distribution to shareholders. In taxable accounts, investors may claim a foreign tax credit for withheld taxes if more than 50% of a fund's assets are non-U.S. securities at year-end; however, this credit is unavailable in retirement accounts like IRAs.

Dividend payments from these funds are uneven due to differing payout schedules in foreign markets. Many European companies pay dividends once or twice annually, often in spring, leading to variable quarterly distributions. For example, IDV paid $0.20 per share in March 2026, $1.10 in June, and $0.53 in September. VYMI paid $0.71 in March and $1.26 in June before dropping to $0.82 in September. SCHY's quarterly payments in 2026 ranged from $0.18 to $0.36 per share.