VYM vs HDV: Which High Dividend ETF Wins?
VYM and HDV both target high-dividend-yielding US stocks, but their methodologies produce quite different portfolios. VYM tracks the FTSE High Dividend Yield Index, selecting stocks by forecasted yield and weighting by market cap (~400 stocks). HDV tracks the Morningstar Dividend Yield Focus Index, screening for financial health and sustainable dividends (~75 stocks). VYM is broader; HDV is more concentrated on quality income payers.
Key Differences
- VYM holds ~400 stocks; HDV holds ~75 — much more concentrated
- HDV screens for financial health (Morningstar moat), VYM uses forecasted yield only
- VYM has lower TER: 0.06% vs HDV's 0.08%
- HDV is heavier in energy and healthcare; VYM is more balanced across financials, healthcare, and consumer staples
- VYM has historically delivered slightly better total returns due to broader diversification
Live Comparison
Interactive comparison with real data. Toggle dividends and tax settings to see the full picture.
Bottom Line
VYM is the better all-around choice for broad high-dividend exposure at lower cost. HDV is better if you specifically want concentrated quality income with a financial health screen. For most dividend investors, VYM's breadth provides a more stable income stream.