Is Vanguard High dividend yield ETF a good investment? (2024)

Is Vanguard High dividend yield ETF a good investment?

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.

Are high dividend yield ETFs good?

High-dividend ETFs may generate income

Dividend-paying ETFs can be a great tool for those looking to increase cash flow and diversify their investments. They offer a simple solution to getting exposure to a specific investing niche — in this case, stocks that pay a regular dividend.

Which Vanguard ETF pays the highest dividend?

ETFs: ETF Database Realtime Ratings
Symbol SymbolETF Name ETF Name1 Year 1 Year
VIGVanguard Dividend Appreciation ETF14.50%
VYMVanguard High Dividend Yield Index ETF6.27%
VYMIVanguard International High Dividend Yield ETF8.23%
VIGIVanguard International Dividend Appreciation ETF10.11%
2 more rows

How often does Vanguard High dividend yield ETF pay dividends?

Vanguard High Dividend Yield Index ETF (VYM)

VYM has a dividend yield of 3.08% and paid $3.48 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Dec 18, 2023.

Is it worth it to buy VYM?

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 an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market.

What are the cons of high dividend ETF?

Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.

Is it better to buy dividend stocks or dividend ETFs?

Dividend ETFs or Dividend Stocks: Which Is Better? Dividend ETFs can be a good option for investors looking for a low-cost, diversified and reliable source of income from their investments. Dividend stocks may be a better option for investors who prefer to choose their own investments.

How does Vanguard High dividend yield ETF work?

About Vanguard High Dividend Yield ETF

The adviser attempts to replicate the target index by investing all, or substantially all, of the fund's assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

What is the annual return on Vanguard High dividend yield ETF?

In the last 30 Years, the Vanguard High Dividend Yield (VYM) ETF obtained a 9.36% compound annual return, with a 14.57% standard deviation. Discover new optimized asset allocations in USD and EUR, in addition to the lazy portfolios on the website.

What is the best high yield dividend ETF?

6 Best High-Dividend ETFs to Buy for 2024
ETFAssets under managementTrailing 12-month dividend yield
iShares Mortgage Real Estate ETF (REM)$636 million9.5%
BlackRock Floating Rate Loan ETF (BRLN)$21 million9.1%
Global X S&P 500 Covered Call ETF (XYLD)$2.8 billion10.9%
SPDR Bloomberg High Yield Bond ETF (JNK)$8.9 billion6.4%
2 more rows
Jan 22, 2024

Why invest in high dividend ETF?

Key Takeaways

Dividend ETFs are passively managed, meaning the fund manager follows an index and does not have to make trading decisions often. Dividend ETFs are good investment options for investors that are risk-averse and income-seeking.

Do Vanguard ETFs automatically reinvest dividends?

Transfer to a Vanguard® fund.

Use our Directed Dividend Plan to have your dividends and/or capital gains distributions reinvested automatically in shares of another identically registered Vanguard holding.

How long do you have to hold an ETF to get a dividend?

Types of dividends

Moreover, the investor must own the shares in the ETF paying the dividend for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. This means if you actively trade ETFs, you probably can't meet this holding requirement.

Why is SCHD better than VYM?

Dividend Yields: Look Beyond the Name

Somewhat ironically, right now, SCHD has a higher yield than the high-yield-focused VYM, with a yield of 3.6% versus VYM's 3.1%, making it the winner from a dividend yield perspective. Both of these yields are superior to the broader market; the S&P 500 currently yields just 1.6%.

Why are Vanguard ETFs so cheap?

Vanguard's unique cost structure, the economies of scale it has achieved, and the total number of assets under management (AUM) allow it to offer its ETFs at the lowest cost available in the market. We've listed 10 of the firm's cheapest ETFs by their expense ratio.

Why are Vanguard ETFs so popular?

Low commission rates start at $0 for U.S. listed stocks & ETFs*. Margin loan rates from 5.83% to 6.83%. No commission fees to trade stocks, options or crypto, and no account minimums to start. One of the key advantages of choosing Vanguard ETFs is the reduced potential for capital gains distributions.

What is the problem with high dividend yield?

In some cases, a high dividend yield can indicate a company in distress. The yield is high because the company's shares have fallen in response to financial troubles. And the high yield may not last for much longer. A company under financial stress could reduce or scrap its dividend in an effort to conserve cash.

Is a high dividend yield risky?

Don't chase high dividend yields

Dividend yield is calculated by dividing a stock's total annual dividend payouts by its current share price. If a high or rising yield is due to a shrinking share price, that's a bad sign and could indicate that a dividend cut is on the horizon.

What are the disadvantages of a high dividend yield?

While high dividend yields are attractive, it's possible they may be at the expense of the potential growth of the company. It can be assumed that every dollar a company is paying in dividends to its shareholders is a dollar that the company is not reinvesting to grow and generate more capital gains.

How many dividend ETFs should I invest in?

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

What are the safest high yield dividend stocks?

20 high-dividend stocks
CompanyDividend Yield
Civitas Resources Inc (CIVI)11.69%
Pennymac Mortgage Investment Trust (PMT)11.57%
International Seaways Inc (INSW)10.80%
CVR Energy Inc (CVI)10.70%
17 more rows
5 days ago

Why not to invest in ETF?

Market risk

The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment. So if you buy an S&P 500 ETF and the S&P 500 goes down 50%, nothing about how cheap, tax efficient, or transparent an ETF is will help you.

Do any Vanguard ETFs pay monthly dividends?

Vanguard is a large investment advisor offering mutual funds and ETFs, many of which pay dividends. Most of Vanguard's ETF products pay monthly or quarterly dividends.

What is a good dividend yield?

The average dividend yield on S&P 500 index companies that pay a dividend historically fluctuates somewhere between 2% and 5%, depending on market conditions. 7 In general, it pays to do your homework on stocks yielding more than 8% to find out what is truly going on with the company.

Does Vanguard do high yield savings?

Andrew Kadjeski, head of brokerage and investments at Vanguard, says the company's high-yield cash savings products are a “significant part” of its overall offering. As interest rates have risen over the past couple of years, investors have paid closer attention to the amount of interest their cash generates.

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