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Is Vanguard High Dividend Yield ETF (VYM) a Strong ETF Right Now?
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The Vanguard High Dividend Yield ETF (VYM - Free Report) was launched on 11/10/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
VYM is managed by Vanguard, and this fund has amassed over $46.92 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, VYM 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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.06% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.98%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 20.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Consumer Staples round out the top three.
When you look at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 3.22% of the fund's total assets, followed by Exxon Mobil Corp. (XOM - Free Report) and Jpmorgan Chase & Co. (JPM - Free Report) .
Its top 10 holdings account for approximately 22.9% of VYM's total assets under management.
Performance and Risk
The ETF has lost about -3.36% so far this year and was up about 4.83% in the last one year (as of 09/13/2022). In the past 52-week period, it has traded between $99.20 and $115.01.
VYM has a beta of 0.84 and standard deviation of 22.78% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 445 holdings, it effectively diversifies company-specific risk.
Alternatives
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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.66 billion in assets, Vanguard Value ETF has $100.65 billion. IWD has an expense ratio of 0.18% and VTV charges 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.
Bottom Line
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.
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Is Vanguard High Dividend Yield ETF (VYM) a Strong ETF Right Now?
The Vanguard High Dividend Yield ETF (VYM - Free Report) was launched on 11/10/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
VYM is managed by Vanguard, and this fund has amassed over $46.92 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, VYM 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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.06% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.98%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 20.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Consumer Staples round out the top three.
When you look at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 3.22% of the fund's total assets, followed by Exxon Mobil Corp. (XOM - Free Report) and Jpmorgan Chase & Co. (JPM - Free Report) .
Its top 10 holdings account for approximately 22.9% of VYM's total assets under management.
Performance and Risk
The ETF has lost about -3.36% so far this year and was up about 4.83% in the last one year (as of 09/13/2022). In the past 52-week period, it has traded between $99.20 and $115.01.
VYM has a beta of 0.84 and standard deviation of 22.78% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 445 holdings, it effectively diversifies company-specific risk.
Alternatives
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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.66 billion in assets, Vanguard Value ETF has $100.65 billion. IWD has an expense ratio of 0.18% and VTV charges 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.
Bottom Line
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.