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Yahoo
02-07-2025
- Business
- Yahoo
Is Vanguard High Dividend Yield ETF (VYM) a Strong ETF Right Now?
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. Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy. Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns. There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies. Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance. While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results. Because the fund has amassed over $61.49 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. VYM is managed by Vanguard. This particular fund, before fees and expenses, seeks to match the performance of the FTSE High Dividend Yield Index. The FTSE High Dividend Yield Index which is consists of common stocks of companies that pay dividends that generally are higher than average. When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal. Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space. It's 12-month trailing dividend yield comes in at 2.62%. Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings. This ETF has heaviest allocation in the Financials sector - about 21.9% of the portfolio. Information Technology and Healthcare round out the top three. Taking into account individual holdings, Broadcom Inc (AVGO) accounts for about 5.82% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM). The ETF has added roughly 6.8% and is up roughly 16.69% so far this year and in the past one year (as of 07/02/2025), respectively. VYM has traded between $114.78 and $135.06 during this last 52-week period. The fund has a beta of 0.78 and standard deviation of 14.26% for the trailing three-year period, which makes VYM a medium risk choice in this particular space. With about 591 holdings, it effectively diversifies company-specific risk . Vanguard High Dividend Yield ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well. Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $70.59 billion in assets, Vanguard Value ETF has $139.02 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.04%. Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard High Dividend Yield ETF (VYM): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
03-06-2025
- Business
- Yahoo
Should Vanguard High Dividend Yield ETF (VYM) Be on Your Investing Radar?
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. The fund is sponsored by Vanguard. It has amassed assets over $59.05 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market. Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies. While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets. Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same. Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space. It has a 12-month trailing dividend yield of 2.85%. It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis. This ETF has heaviest allocation to the Financials sector--about 21.50% of the portfolio. Information Technology and Consumer Staples round out the top three. Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 4.78% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM). VYM seeks to match the performance of the FTSE High Dividend Yield Index before fees and expenses. The FTSE High Dividend Yield Index which is consists of common stocks of companies that pay dividends that generally are higher than average. The ETF has gained about 2.09% so far this year and was up about 10.92% in the last one year (as of 06/03/2025). In the past 52-week period, it has traded between $114.78 and $135.06. The ETF has a beta of 0.78 and standard deviation of 14.69% for the trailing three-year period, making it a medium risk choice in the space. With about 593 holdings, it effectively diversifies company-specific risk. Vanguard High Dividend Yield ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VYM is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well. The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $68.10 billion in assets, Vanguard Value ETF has $133.44 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%. An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard High Dividend Yield ETF (VYM): ETF Research Reports JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
06-03-2025
- Business
- Globe and Mail
Want Decades of Passive Income? Buy This ETF and Hold It Forever.
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. One of my favorite dividend ETFs for long-term investors is the Vanguard High Dividend Yield ETF (NYSEMKT: VYM). As the name suggests, this ETF invests in stocks with above-average dividend yields, and it can be an excellent way to grow a passive income stream that can eventually provide you with worry-free income after you retire. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » With that in mind, here's an overview of this excellent ETF, and the surprising wealth-building power it has. A rock-solid collection of dividend stocks The Vanguard High Dividend Yield ETF tracks the FTSE High Dividend Yield Index, which is a weighted index of large-cap stocks with relatively high dividend yields. As of the latest information from Vanguard, the fund owns 530 stocks and top holdings include Broadcom (NASDAQ: AVGO), JPMorgan Chase (NYSE: JPM), ExxonMobil (NYSE: XOM), and Walmart (NYSE: WMT), just to name a few. Of course, it's impractical to list all of the fund's stocks here, but the general idea is that these are large, well-established businesses that have stable cash flow. While it isn't the most concentrated index fund, 26% of its assets are in its 10 largest stocks, with the top holding, Broadcom, making up 5.5% of the portfolio all by itself. Like other Vanguard index funds, the Vanguard High Dividend Yield ETF has extremely low investment fees. Its 0.06% expense ratio means that for every $10,000 in fund assets, you'll pay just $6 per year toward management and administrative expenses. (This isn't a fee you have to pay. It will simply be reflected in the ETF's performance over time.) Because this ETF collects dividends from more than 500 stocks and passes them through to investors, its payout can be somewhat unpredictable, but the general direction should be up over time. As of this writing, the Vanguard High Dividend Yield ETF has a 2.7% annual dividend yield and has a solid history of increasing its dividend over the long run, as the following chart shows. VYM Dividend data by YCharts A great compounder, and eventually a great income investment Although past performance of any investment doesn't guarantee its future results, the Vanguard High Dividend Yield ETF has generated 10.1% annualized total returns over the past decade, so don't make the mistake of thinking that this is just a solid income investment. It can provide excellent growth over time, and if you reinvest your dividends, which is a solid strategy before you reach retirement, it can be a great wealth-building tool. Again, there's no way to know how this ETF will perform in the future. But for context, a $10,000 investment compounded at a 10.1% annual rate could grow to about $23,775 after a decade, $62,225 after 20 years, and nearly $163,000 after 30 years. And that's based on a one-time investment. If you invest $10,000 and then add just $100 per month, your 30-year return could be about $345,000 based on that historical return. Then, once you reach retirement age, you can simply turn off automatic reinvestment and enjoy a high dividend yield from your nest egg. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $304,161!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $44,694!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $534,395!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon. *Stock Advisor returns as of March 3, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase, Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF, and Walmart. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
