A smart beta exchange traded fund, the Vanguard High Dividend Yield ETF (VYM) debuted on 11/10/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
The Vanguard High Dividend Yield ETF (NYSE: VYM) is an exchange-traded fund that tracks the FTSE High Dividend Yield Index.
In this article, I will show you how to build a dividend portfolio that holds VYM as a core element while enhancing the ETF with 10 individually selected companies. By including these companies, the Strategically Enhanced VYM Plus 10 Portfolio offers investors a superior mix of dividend income and dividend growth. At the same time, it provides investors with an additional diversification across sectors and a further optimized risk-reward profile when compared to only investing in VYM.
The Vanguard High Dividend Yield Index Fund ETF offers a diversified portfolio of high-income stocks with a low expense ratio of 0.06%. The ETF focuses on high-quality, dividend-paying stocks, with top holdings in Broadcom, JPMorgan Chase, and Exxon Mobil. VYM has achieved solid long-term returns with a diversified portfolio.
Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Vanguard High Dividend Yield ETF (VYM), a passively managed exchange traded fund launched on 11/10/2006.
Building a portfolio with high-yield ETFs and CEFs simplifies the passive income snowball construction process considerably. This article discusses how to combine Vanguard High Dividend Yield Index Fund ETF Shares with just two other funds to build a well-diversified passive income snowball for retirement. The VYM fund pays out a 7% weighted average yield — most of which is paid out monthly — and also delivers dividend growth.
VYM is a low-cost dividend ETF offering an expected 2.74% dividend yield. Historically, it's delivered average returns in the large-cap value category because it's well-balanced on all factors. Low portfolio turnover and strong diversification are additional reasons to own VYM, especially for passive investors not interested in following the sometimes-eventful reconstitution of competitors like SCHD. VYM also holds an advantage over its peers in dividend safety. Its payout ratio is sufficiently low, and its constituents have paid dividends for nearly 28 years on average.
Finding great dividend stocks with the potential to raise payouts every year indefinitely can be difficult. Simply investing in all stocks with above-average dividend yields has historically produced great returns.
The Vanguard ETF has a nearly 2.9% yield. The portfolio is large but is heavily invested in certain sectors like utilities and finance.
VYM continues to outperform its peers, offering a 2.83% yield and 13 years of dividend growth, making it attractive for income investors. Anticipated Fed rate cuts and declining crude prices are expected to benefit VYM's holdings, particularly in financials, consumer defensive, and industrial sectors. Despite market volatility, VYM's balanced approach and low expense ratio position it well for potential capital reallocation from money market accounts.
VYM, SDIV, DIV, VIG and NOBL are included in this Analyst Blog.
The high dividend yield factor has improved its relative performance in recent months, while the fund has made new highs in the second half. With a mid-teens earnings multiple, I continue to see a solid value case in the Vanguard High Dividend Yield Index ETF. With 13 years of rising dividends, I offer a refreshed look at this US large-cap value fund and eye the charts.