The Vanguard High Dividend Yield ETF (NYSE: VYM | VYM Price Prediction) is an exchange-traded fund that tracks the FTSE High Dividend Yield Index. The index is comprised of U.S. stocks with above average dividend yields, giving investors a low cost way to basket the highest paying dividend stocks in one equity.
Passive income seekers or investors looking for more dividend exposure in their portfolio will find VYM attractive for its 2.70% dividend yield (paid quarterly) and its very low expense ratio of .06%. VYM is comprised of 537 stocks with above average dividend yields, making the ETF one of the most diversified ETFs you can find.
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- VYM provides a 2.70% dividend yield, offering long-term stability and broad sector diversification for passive income seekers.
- VYM focuses on high dividend yield and wide sector exposure, while SCHD prioritizes dividend growth and financial strength.
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VYM Dividend Yield History 2014- 2024
The Vanguard High Dividend Yield ETF average yield dropped over the last year due to the remarkable 1 year performance of the equity, gaining 28.02% in share price. As we will see below, a few of the largest positions in the fund had stellar years that drove the share price higher which dropped the distribution yield, even though the total distributions received was higher than the previous 12 months.
| Year | Distributions | Average Share Price | Average Yield |
| Trailing 12 Months (TTM) | $3.63 | $119.61 | 2.12% |
| 2023 | $3.49 | $106.20 | 3.29% |
| 2022 | $3.26 | $107.54 | 3.03% |
| 2021 | $3.10 | $104.08 | 2.98% |
| 2020 | $2.91 | $83.11 | 3.50% |
| 2019 | $2.85 | $87.09 | 3.27% |
| 2018 | $2.65 | $84.9 | 3.12% |
| 2017 | $2.40 | $79.52 | 3.02% |
| 2016 | $2.21 | $70.40 | 3.14% |
| 2015 | $2.15 | $67.74 | 3.17% |
| 2014 | $1.91 | $65.21 | 2.93% |
| $1.75 | $57.07 | 3.07% |
VYM Criteria and Who is Right For This Stock
- Dividends and diversification– VYM focuses on U.S. traded companies that currently have above average dividend yields that offer reliable income streams. The fund excludes REITs due to unfavorable tax rate on qualified dividends. However it includes a very broad range of sectors that gives the fund a risk adjusted profile that is good for stable, income seeking investors.
- VYM vs. SCHD– VYM and Schwab U.S. Dividend Equity Fund (SCHD) are both strong dividend-focused ETFs, but they differ in their approaches. VYM emphasizes high dividend yield and includes a broader range of stocks, offering wider sector diversification. It focuses on income by investing in companies with higher dividend payouts. SCHD, on the other hand, prioritizes dividend growth and financial strength, selecting stocks that consistently increase dividends and exhibit solid fundamentals
- Who is VYM built for?– VYM is an ideal equity for passive income investors looking for a very broad, diverse portfolio of dividend paying stocks (VYM holds 537 positions compared to SCHD’s 103 holdings). Retirees, conservative investors, and anyone looking for consistent cash flow without taking on excessive risk will benefit from VYM
Top 10 Largest Positions in VYM
| Ticker | Company Name | 1 Yr. Stock Performance | Percentage of Assets | Market Value |
| AVGO | Broadcom | 103.3% | 4.42% | $3.21 B |
| JPM | JPMorgan Chase | 52.72% | 3.41% | $2.48 B |
| XOM | Exxon Mobil | 7.67% | 2.97% | $2.16 B |
| PG | Procter & Gamble | 17.24% | 2.30% | $1.68 B |
| HD | Home Depot | 39.89% | 2.27% | $1.65 B |
| JNJ | Johnson & Johnson | 5.52% | 2.20% | $1.60 B |
| WMT | Walmart | 51.04% | 1.98% | $1.44 B |
| ABBV | AbbVie | 26.29% | 1.97% | $1.43 B |
| MRK | Merck & Co | 4.64% | 1.62% | $1.18 B |
| KO | Coca-Cola | 30.04% | 1.57% | $1.14 B |
Is VYM a Buy?
VYM offers a steady income stream and could be right for investors looking to add an long-term stability and broad sector diversification to their portfolio. That said, VYM does not compete with alternative income streams in the shorter term, even the 2.70% yield is trumped by the current federal funds rate.
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