The Vanguard High Dividend Yield ETF (VYM) made its debut on 11/10/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
Vanguard High Dividend Yield ETF (VYM) is a diversified, large-cap fund offering consistent income and growth, but currently rated as a hold. VYM outperforms its peer group in total returns over 1 and 5 years and boasts the lowest expense ratio at 0.06%. Despite strong performance, VYM's dividend yield and growth lag both the ETF median and most peers, raising concerns for income-focused investors.
One of my favorite ways to invest in stocks is through exchange-traded funds (ETFs) because they simplify the investment process. You don't need to spend hours researching companies or making the "right" investment.
Dividend exchange-traded funds have become a popular way to own a diverse set of stocks while generating steady, passive income.
Exchange-traded funds (ETFs) have emerged as a popular investment option for portfolio diversification.
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 November 10, 2006.
VYM has delivered strong 1-year performance and offers long-term dividend growth, but its heavy financial sector exposure is concerning as rate cuts loom. I am downgrading VYM from a buy to hold due to the risk that falling federal fund rates will hurt banks and financials, dragging down the ETF's NAV returns. While VYM has solid historical NAV growth, SCHD has outperformed it and offers better sector diversification, especially less exposure to the financial sector.
The S&P 500 looks historically expensive, trading at over 30x earnings, making future returns riskier for investors. Vanguard High Dividend Yield Index Fund ETF Shares offers a more reasonable valuation, with a 20x P/E and a 5% earnings yield, compared to the overheated broader market. While VYM's yield is below treasuries, its dividend growth and stability provide a buoy against market volatility for long-term investors.
SCHD ETF is a favorite among dividend-growth ETF investors. However, VYM does have some advantages over SCHD. We discuss when I would buy VYM instead of SCHD (and when I wouldn't).
The Vanguard High Dividend Yield Index Fund ETF (NYSEARCA:VYM) is one of the many dividend ETFs you can choose.
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.
VYM offers low-cost, broad diversification and dependable income, making it ideal for retirees or income-focused investors seeking inflation-resistant cash flow. The fund's recent underperformance versus the broader market may present a buying opportunity, especially if inflation rebounds and dividend strategies come back in favor. VYM consistently tracks its benchmark with minimal deviation, thanks to Vanguard's scale and ultra-low expense ratio, outperforming higher-cost peers over time.