Vanguard's High Dividend Yield ETF offers a balanced mix of well-known names across market segments that pay solid dividends.
Keeping costs down is imperative, whether you're trying to stay on a budget or are investing for the long haul. Either way, costs can accumulate over time and put you in a much worse financial position.
It hasn't been the best start to 2025 for the major indexes of the U.S. stock market. As of March 7, the S&P 500 is down, the Nasdaq Composite is down, and the Dow Jones is essentially flat.
You don't need to do anything extraordinary to create a solid stream of income with upside potential. There are some excellent low-cost exchange-traded funds, or ETFs, that specialize in dividend stocks.
The high dividend yield factor has produced significant alpha in 2025, with VYM outperforming the S&P 500 and earning a buy rating. VYM offers a low P/E ratio, strong relative strength, and a high 2.61% trailing 12-month yield, making it an attractive investment. VYM's portfolio is diversified with a notable weight in mid-caps and sectors like Financials, Energy, and Utilities, which have produced YTD alpha.
VYM: Risk Premium Still Near 10-Year Peak Despite Treasury Rates Decline
Making its debut on 11/10/2006, smart beta exchange traded fund Vanguard High Dividend Yield ETF (VYM) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
The Vanguard High Dividend Yield Index Fund ETF Shares' yield is lackluster, and its dividend growth is slowing—here's how to boost your yield and dividend growth. These alternatives deliver higher yields, rapid dividend growth, and stronger long-term returns. Unlock inflation-beating income and long-term outperformance by supplementing VYM with these high-growth dividend plays.
Retail investors are looking to add exchange-traded funds (ETFs) to their portfolios to reduce risk and achieve diversification.
VYM has a 93% correlation with the S&P 500 but has underperformed due to lower exposure to the technology sector and conservative consumer defensive sector. VYM's expense ratio is 0.06%, with a yield of 2.61%, and $75.86 billion in assets, making it a moderate growth fund with minimal income payouts. The ETF's holdings are diversified, but core healthcare stocks like Merck and Johnson & Johnson have underperformed, impacting overall returns.
The Vanguard High Dividend Yield ETF (VYM) was launched on 11/10/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
Vanguard High Dividend Yield Index ETF is poised for outperformance in 2025 due to heavy exposure to the Financials sector benefiting from higher federal fund rates. The ETF's low-cost structure and focus on high-yielding stocks make it an attractive option for long-term wealth creation and dividend reinvestment. Significant holdings include Broadcom, JPMorgan, and ExxonMobil, with Financials comprising 23% of the portfolio.