The Vanguard International High Dividend Yield ETF (VYMI) is gaining attention as a noteworthy option for dividend investors, despite not being owned by the author at this time.

Currently, VYMI boasts a trailing-12-month dividend yield of 3.68%, surpassing several top dividend index funds. Its price-to-earnings (P/E) ratio stands at 13.3, making it approximately 43% less expensive than the S&P 500, which has an earnings multiple of 23.4.

Over the past year, VYMI has notably outperformed the S&P 500, highlighting its potential for continued growth.

Vanguard's market forecast suggests that over the next 30 years, international stocks, particularly those from developed markets, are expected to outperform U.S. stocks. Developed market equities are projected to yield annualized returns between 6.2% and 8.2%, while U.S. stocks are estimated to deliver returns of only 4.9% to 6.9%.

VYMI is well-positioned to take advantage of this anticipated trend towards international investment, particularly in developed markets.

The ETF is highly diversified, comprising a portfolio of 1,567 stocks from 45 countries, with about 22% of its holdings in emerging markets. The majority of its assets are allocated to developed markets, including Japan (12.2%), the United Kingdom (11%), Canada (8.8%), Australia (7.2%), and Switzerland (7.2%).

While there is no certainty that VYMI will outperform U.S. stocks over the long term, it may appeal to investors who are skeptical about the sustainability of growth in U.S. tech stocks or believe that international markets are poised for better performance.

Additionally, VYMI could benefit from advancements in artificial intelligence (AI), as the potential gains from AI might not be limited to U.S. growth stocks. Companies across various sectors globally, including banks, pharmaceuticals, and consumer staples, could see significant productivity boosts.

If AI drives overall economic growth, industries that are traditionally stable and offer strong dividends may experience the most substantial benefits. With VYMI's current P/E ratio indicating it is still reasonably priced, it presents a compelling option for dividend-focused investors.