Vanguard High Dividend Yield ETF

Provides broad exposure to U.S. companies that have a history of paying higher-than-average dividends.

Why This Week?

VYM is the ultimate low-cost dividend workhorse. With over 400 holdings, it offers tremendous diversification across high-yield sectors like financials, consumer staples, and healthcare. Its rock-bottom 0.06% expense ratio ensures you keep more of your yield. While competitors like SCHD focus on strict quality screens, VYM focuses on providing a broader basket of high-yielding stocks.

Key Metrics

Dividend Yield

~2.8%

Expense Ratio

0.06%

Holdings

~450

AUM

$50B+

Top Holdings

5 holdings shown. Weights are approximate.

#NameWeight

AVGOBroadcom

~3.5%

JPMJPMorgan Chase

~3.2%

XOMExxon Mobil

~3.0%

JNJJohnson & Johnson

~2.5%

HDHome Depot

~2.3%

Pros & Cons

Strengths

Extremely low expense ratio (0.06%).
Broad diversification with ~450 holdings limits single-stock risk.
Solid dividend yield that is historically higher than the S&P 500.
Vanguard's reputation for tight index tracking and low costs.

Risks & Weaknesses

Lower quality screening compared to SCHD.
Tends to underperform in strong growth or tech-led bull markets due to its value tilt.
Slower dividend growth rate compared to DGRO or SCHD.
No international exposure.

Alternatives Comparison

ETF	Name	TER	Focus
VYMThis Week	Vanguard High Dividend Yield ETF	0.06%	Provides broad exposure to U.S. companies that have a history of paying higher-than-average dividends.
SCHD	Schwab U.S. Dividend Equity ETF	0.06%	Higher quality screens, ~100 holdings
DGRO	iShares Core Dividend Growth ETF	0.08%	Focus on dividend growth rate rather than pure yield

💬 Frequently Asked Questions

It depends on your goals. SCHD has historically provided slightly better total returns due to its strict quality screens, but holds only about 100 stocks. VYM is far more diversified with over 400 stocks and provides a very similar yield. Both are excellent choices for dividend investors.

Yes, the vast majority of VYM's distributions are considered 'qualified dividends' in the U.S., meaning they are taxed at a lower capital gains rate rather than ordinary income.

Want to Explore Further?

VYM launched recently, so try backtesting SMH or SOXX as semiconductor proxies, or explore our ETF database for alternatives.

Backtest SMH + SOXX ETF Explorer

Disclaimer: ETF of the Week is educational content only. It is not investment advice, a recommendation to buy or sell, or an endorsement of any fund. Past performance does not guarantee future results. Always do your own research and consult a financial advisor before investing.