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Is Vanguard High Dividend Yield Index Fund ETF Shares (VYM) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Vanguard High Dividend Yield Index Fund ETF Shares (VYM - Free Report) debuted on 11/10/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $81.88 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. VYM is managed by Vanguard. VYM, 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.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.04% for VYM, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.25%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 21.8% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 7.34% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxonmobil Holdings Corp (XOM).
Performance and Risk
The ETF return is roughly 13.77% and is up about 16.97% so far this year and in the past one year (as of 09/16/2026), respectively. VYM has traded between $137.47 and $167.03 during this last 52-week period.
The fund has a beta of 0.73 and standard deviation of 12.24% for the trailing three-year period, which makes VYM a medium risk choice in this particular space. With about 613 holdings, it effectively diversifies company-specific risk .
Alternatives
Vanguard High Dividend Yield Index Fund ETF Shares 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 Morningstar Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $111.89 billion in assets, Vanguard Morningstar Value ETF has $190.39 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.
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 Index Fund ETF Shares (VYM) a Strong ETF Right Now?
A smart beta exchange traded fund, the Vanguard High Dividend Yield Index Fund ETF Shares (VYM - Free Report) debuted on 11/10/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $81.88 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. VYM is managed by Vanguard. VYM, 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.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.04% for VYM, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.25%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 21.8% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 7.34% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxonmobil Holdings Corp (XOM).
Performance and Risk
The ETF return is roughly 13.77% and is up about 16.97% so far this year and in the past one year (as of 09/16/2026), respectively. VYM has traded between $137.47 and $167.03 during this last 52-week period.
The fund has a beta of 0.73 and standard deviation of 12.24% for the trailing three-year period, which makes VYM a medium risk choice in this particular space. With about 613 holdings, it effectively diversifies company-specific risk .
Alternatives
Vanguard High Dividend Yield Index Fund ETF Shares 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 Morningstar Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $111.89 billion in assets, Vanguard Morningstar Value ETF has $190.39 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.
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.