Vanguard's flagship dividend ETF offers broad exposure to 500+ high-yield U.S. stocks at rock-bottom costs. Here is our complete breakdown.
$55B+
Assets Under Management
2.85%
Current Yield
0.06%
Expense Ratio
550+
Total Holdings
The Vanguard High Dividend Yield ETF (VYM) tracks the FTSE High Dividend Yield Index, which selects U.S. stocks forecasted to have above-average dividend yields. With over 550 holdings, VYM provides one of the broadest dividend-focused exposures available in a single ETF.
Launched in November 2006, VYM has nearly two decades of track record and has weathered the 2008 financial crisis, the COVID crash, and multiple market corrections. Its Vanguard pedigree means investors benefit from industry-leading cost efficiency and a shareholder-first philosophy.
VYM uses a straightforward yield-based methodology. The FTSE High Dividend Yield Index ranks all eligible U.S. stocks by their forecasted 12-month dividend yield and includes the top half by yield (excluding REITs). This simple approach results in a massive, diversified portfolio.
Start with all U.S. common stocks, excluding REITs, that pay dividends
Rank all stocks by their forecasted 12-month forward dividend yield
Include the top 50% of stocks by yield, weighted by market capitalization
The market-cap weighting means the largest companies (like JPMorgan, Broadcom, and ExxonMobil) have the most influence on fund performance. This naturally tilts VYM toward established, financially stable blue-chip companies.
| Company | Ticker | Weight | Sector |
|---|---|---|---|
| Broadcom | AVGO | 4.21% | Technology |
| JPMorgan Chase | JPM | 3.85% | Financials |
| ExxonMobil | XOM | 3.12% | Energy |
| Procter & Gamble | PG | 2.54% | Consumer Staples |
| Johnson & Johnson | JNJ | 2.38% | Healthcare |
| Home Depot | HD | 2.21% | Consumer Disc. |
| AbbVie | ABBV | 2.15% | Healthcare |
| Walmart | WMT | 1.98% | Consumer Staples |
| Chevron | CVX | 1.87% | Energy |
| Merck & Co. | MRK | 1.82% | Healthcare |
Top 10 holdings represent approximately 26.1% of total fund assets. Holdings as of Q1 2026.
| Period | VYM Return | S&P 500 Return | Difference |
|---|---|---|---|
| 1-Year | 9.8% | 12.4% | -2.6% |
| 3-Year | 7.2% | 10.1% | -2.9% |
| 5-Year | 10.4% | 13.8% | -3.4% |
| 10-Year | 10.2% | 12.5% | -2.3% |
| Since Inception (2006) | 9.1% | 10.7% | -1.6% |
Returns are annualized total returns including reinvested dividends. Past performance does not guarantee future results.
VYM has historically trailed the S&P 500 by 1-3% annually, which is expected since it excludes many high-growth tech stocks that do not pay dividends. However, VYM has provided meaningful income and lower drawdowns during market corrections, making it attractive for income-focused investors.
Financials dominate VYM at over 21%, reflecting the sector's historically strong dividend payouts. The fund also has meaningful utilities and materials exposure that you will not find in SCHD, providing even broader diversification across dividend-paying sectors.
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| Year | Annual Dividend | YoY Growth |
|---|---|---|
| 2020 | $2.9061 | -2.5% |
| 2021 | $3.0961 | 6.5% |
| 2022 | $3.2518 | 5.0% |
| 2023 | $3.4378 | 5.7% |
| 2024 | $3.5842 | 4.3% |
| 2025 | $3.7916 | 5.8% |
Key Insight: VYM's dividend growth rate of approximately 5-6% annually is more modest than SCHD's 12%, but it starts from a broader, more diversified base. For investors who prioritize diversification over maximum dividend growth, VYM's steady trajectory is appealing.
With 550+ holdings and automatic rebalancing, VYM requires zero maintenance. Buy it once, reinvest dividends, and let it compound for decades.
If you are uncomfortable with a concentrated 100-stock portfolio like SCHD, VYM's 550+ holdings across all major sectors provides peace of mind.
If you already hold your investments at Vanguard, VYM integrates seamlessly with your existing portfolio and benefits from Vanguard's unique mutual ownership structure.
Yes, VYM is well-suited for retirees who want reliable quarterly income with broad diversification. Its 2.85% yield provides meaningful income, and its 550+ holdings reduce the risk of any single dividend cut significantly impacting your income stream.
VYM offers broader diversification (550+ vs. 100 holdings) but lower dividend growth (~5-6% vs. ~12% for SCHD). SCHD uses quality screens while VYM selects purely on yield. Both charge 0.06%. Choose SCHD for growth, VYM for diversification.
No, VYM excludes REITs from its index. The FTSE High Dividend Yield Index specifically removes REITs, which means VYM dividends are predominantly qualified dividends taxed at the lower capital gains rate.
You can buy a single share of VYM (approximately $120-130 in early 2026) through any brokerage. Most major brokerages including Vanguard, Fidelity, and Schwab also offer fractional shares starting from $1.
Absolutely. Holding VYM in a Roth IRA is an excellent strategy because all dividend income and capital gains grow tax-free. Since VYM produces regular dividend income, the tax-free compounding benefit is significant over time.