2 Vanguard ETFs That Have Outperformed the Market in 2025

Strong Performers Amid Market Turbulence

In a year marked by volatility and declining asset prices, two Vanguard exchange-traded funds (ETFs) have emerged as standout performers. The Vanguard FTSE Europe ETF (VGK) and the Vanguard International High Dividend Yield Index Fund ETF (VYMI) have both registered gains exceeding 7% year-to-date, providing a safe haven for investors seeking stability and returns outside of the U.S. market.

As of April 25, 2025, the S&P 500 index is down more than 12% since the start of the year. The downturn reflects broader market concerns, particularly in the technology sector, which has historically played a significant role in the index’s performance. This year, tech stocks have been notably sluggish, with major players like Nvidia posting a steep decline of 28%, contributing to the overall poor performance of the S&P 500. ## Diversification Opportunities

Investors looking for an alternative to domestic stocks have been increasingly attracted to these Vanguard ETFs, which offer exposure to international markets. The Vanguard FTSE Europe ETF specifically invests in stocks from various European countries, positioning investors to benefit from growth opportunities outside the U.S. The fund’s diversified holdings can mitigate the risks associated with local economic conditions, thus providing a hedge against market declines.

Similarly, the Vanguard International High Dividend Yield Index Fund ETF focuses on equities that offer high dividend yields from non-U.S. sources. This appeal for income generation is significant, especially in uncertain market climates where yield-seeking behavior becomes more pronounced. These ETFs not only offer competitive returns but also feature dividend yields above the market average, making them attractive to income-focused investors.

An Attractive Investment Choice

While the market faces challenges, the performance of VGK and VYMI illustrates the potential benefits of global diversification. These Vanguard funds provide a balanced approach to investing, allowing individuals to tap into international growth while mitigating the risks associated with concentrated portfolios.

For investors navigating a turbulent market, these ETFs not only present an opportunity for capital appreciation but also for cultivating a more resilient investment strategy through global exposure. As the landscape continues to evolve, exploring robust diversified options could prove beneficial in both the short and long term.

For those considering diversified fund investments, the Vanguard FTSE Europe ETF and the Vanguard International High Dividend Yield Index Fund ETF may serve as worthwhile contenders in the current market environment.