Which Is the Better Vanguard ETF, VYM or VIG?

The Vanguard High Dividend Yield ETF (NYSEMKT:VYM) delivers a higher output and little caller volatility, portion the Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) tilts toward tech and dividend growth, with some charging identical 0.04% expenses and boasting ample plus pools.

Both VYM and VIG are halfway U.S. equity ETFs from Vanguard, but they instrumentality antithetic approaches. VYM targets stocks with precocious existent yields, portion VIG focuses connected companies with a accordant way grounds of increasing dividends. This examination highlights their cardinal differences successful income, assemblage exposure, and hazard profile.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

Both funds are arsenic affordable astatine 0.04% successful yearly expenses, but VYM delivers a higher income payout astatine 2.3% compared to VIG’s 1.5%, which whitethorn entreaty to investors seeking yield.

VIG tracks companies with a beardown past of yearly dividend increases, concentrating successful exertion (23%), fiscal services (20%), and healthcare (18%). The money holds 338 stocks, with its apical 3 positions — Broadcom (NASDAQ:AVGO), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) — accounting for a meaningful information of assets. With a twenty-year way grounds and implicit $117.1 cardinal successful assets nether absorption (AUM), VIG offers broad, but somewhat much concentrated, vulnerability to large-cap dividend growers.

In contrast, VYM is much diversified crossed 5 589 holdings and leans toward fiscal services (20%), exertion (15%), and healthcare (13%). Its largest positions see Broadcom, JPMorgan Chase (NYSE:JPM), and Exxon Mobil (NYSE:XOM). VYM’s accent connected stocks with higher yields results successful a antithetic assemblage premix and a higher existent income profile.

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Vanguard is known for debased fees, and that’s what the Vanguard High Dividend Yield ETF (VYM) and Vanguard Dividend Appreciation ETF (VIG) person successful common. Beyond that, they people antithetic strategies, and that tin assistance to find the money that matches your concern goals best.

VIG’s absorption is connected companies that turn dividends implicit clip arsenic a cardinal means of delivering superior appreciation and a bully full instrumentality implicit the agelong haul. The tradeoff is simply a little dividend output compared to VYM, and greater volatility, arsenic illustrated by its higher max drawdown implicit the past 5 years. Yet fixed its larger vulnerability to the tech sector, it has the imaginable to present outsized results acknowledgment to the emergence of artificial intelligence.