International high-yield funds beat the S&P 500. Foreign stocks did not.

High-yield international dividend funds beat the S&P 500 this year. Foreign stocks as a whole did not.

Thirty-five index funds track a dividend screen. Nearly all of them hold stocks outside the United States. A few are global and hold U.S. stocks too.

Through Nov. 2, the typical fund, the median of the 35, returned 13.3%, dividends included. State Street SPDR S&P 500 ETF SPY returned 11.2%, dividends included. Vanguard Total International Stock ETF VXUS returned 10.3% on its market price, dividends included, Vanguard reported.

High yield against dividend growth

Vanguard runs the two large funds on opposite rules. Vanguard International High Dividend Yield ETF VYMI tracks the FTSE All-World ex US High Dividend Yield Index, stocks outside the United States forecast to pay above-average yields. Vanguard International Dividend Appreciation ETF VIGI tracks the S&P Global Ex-U.S. Dividend Growers Index, companies outside the United States with a record of raising dividends.

Through Nov. 2, VYMI returned 16.0% in 2026 and 23.8% over the past year. VIGI returned 10.1% and 13.4%. It beat SPY over the past year, 13.4% to 11.5%. It did not beat SPY in 2026, and it trailed VYMI on both windows.

As of Sept. 30, VYMI held $21.4 billion. Financials were 44.5% of the fund, and Japan was 12.6% of its stocks. VIGI held $8.8 billion, with 29.8% in financials and 32.7% of its stocks in Japan.

In the third quarter, ended Sept. 30, the typical fund returned 1.4% and SPY returned 2.4%. VYMI returned 3.8% and VIGI returned 1.6%. The typical fund lost to SPY in the quarter. VYMI did not.

The top fund hedges the dollar

Over the past year the typical fund returned 20.3%, against 11.5% for SPY. That lead is wider than the one in 2026, 13.3% against 11.2%, because the longer window still includes late 2025.

U.S. Bank said on Oct. 14 that the U.S. Dollar Index fell 9.4% in 2025 and rose 4.3% this year through Oct. 12. A weaker dollar, the bank said, raised the value of overseas returns after conversion into dollars, and this year's rise cut into those returns.

The best result through Nov. 2 was Franklin Templeton's Franklin International Low Volatility High Dividend Index ETF LVHI, up 27.8% over the past year and 20.3% in 2026. Franklin's Sept. 30 fact sheet says the fund hedges currency exposure to reduce the effect of currency moves on returns, and that the hedge does not necessarily eliminate that exposure.

The year did not show that foreign stocks beat the S&P 500. It showed that a high-yield screen did, and that VIGI did not.