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.
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Vanguard High Dividend Yield ETF (VYM) is a passively managed exchange traded fund launched on 11/10/2006.
Vanguard's High Dividend Yield Index Fund ETF Shares (VYM) has a history of delivering a balance of steady income and capital appreciation over the long term.
Tariff developments since my last writing have led me to see an improved return/risk profile for VYM, especially when compared to international peers such as SCHY. VYM has historically outperformed SCHY and I expect such performance to continue for several reasons. The top reasons are VYM's more attractive growth-adjusted valuations, broader diversification, and U.S. market advantages.
Vanguard High Dividend Yield Index Fund is rated a 'Sell' due to its lack of tech exposure and underperformance compared to peers. VYM's 2.93% dividend yield and 148% appreciation since inception are overshadowed by better-performing ETFs like VOO and SCHD. The Fund's 9.1% tech sector weighting and slower dividend growth make it less attractive for both dividend and market ETF investors.
Two of the largest US dividend-focused ETFs are Vanguard's VYM and Schwab's SCHD. SCHD has a significantly higher dividend yield and historic dividend growth rate, along with better Seeking Alpha Dividend Grades among its top holdings. VYM's big advantage is that it is more diversified, though it still has 24% in its top 10 holdings, and at a cost of a significantly lower yield than SCHD.
Q2 2025 began with market volatility due to tariff announcements, resulting in SPY losing 0.87% and VYM declining by 3.54%. Since inception, my watchlist has a CAGR of 14.61%, outperforming SPY and VYM, and providing higher yields. The May 2025 watchlist includes 10 stocks with an average forward dividend yield of 3.59% and an expected return of 14.78%.
The Vanguard High Dividend Yield ETF (VYM) was launched on 11/10/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
The Vanguard High Dividend Yield Index Fund ETF offers diversified exposure to high-yield, dividend-paying stocks, with significant holdings in Broadcom, JPMorgan Chase, and ExxonMobil. Previously rated a buy due to strong Finance sector performance, the ETF faces risks from potential federal fund rate cuts impacting financial institutions' net interest income. The ETF has achieved solid net asset value growth since 2006 and is growing its dividend at a rapid clip.
Wild stock market gyrations like those we are experiencing now tend to cause investors to flee to safer, more stable investments.