The Vanguard High Dividend Yield ETF (VYM Quick QuoteVYM - Free Report) was launched on November 10, 2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $69.54 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 2.4%.

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.

This ETF has heaviest allocation to the Financials sector -- about 21.7% of the portfolio. Information Technology and Healthcare round out the top three.

Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 8.23% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).

Performance and Risk

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 added roughly 17.05% so far this year and was up about 14.55% in the last one year (as of 12/11/2025). In the past 52-week period, it has traded between $114.78 and $146.79.

The ETF has a beta of 0.76 and standard deviation of 12.83% for the trailing three-year period, making it a medium risk choice in the space. With about 572 holdings, it effectively diversifies company-specific risk.

Alternatives

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 a great 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 $71.26 billion in assets, Vanguard Value ETF has $156.62 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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.