Highest-earning Vanguard ETF could potentially fall short as the optimal choice to hold
In the world of investment, seeking high dividend yields is a common goal for many investors. Vanguard, a leading name in the financial industry, offers a variety of Exchange-Traded Funds (ETFs) that cater to this need. Let's explore some of the top Vanguard ETFs with high dividend yields.
One of the standout funds is the Vanguard High Dividend Yield ETF (VYM), which focuses on U.S.-based high dividend-yielding companies excluding Real Estate Investment Trusts (REITs). With a dividend yield of approximately 2.6%, VYM boasts a broad portfolio of large- and mid-cap U.S. stocks such as Broadcom, JPMorgan Chase, Exxon Mobil, and Walmart.
Another notable Vanguard ETF related to dividends is the Vanguard Dividend Appreciation ETF (VIG). This ETF targets companies with a history of increasing dividends over at least ten years, though its yield is lower at around 1.7%. VIG emphasizes dividend growth, making it an attractive choice for investors seeking long-term dividend growth rather than high current yields.
When comparing these two, VYM stands out as the top high-dividend yielding Vanguard ETF (excluding the Vanguard International High Dividend Yield ETF, or VYMI), due to its broader portfolio and focus on U.S. stocks.
Moving on to the international scene, the U.S. counterpart to the Vanguard International High Dividend Yield ETF (VYMI) is the Vanguard High Dividend Yield ETF (VYM). However, despite slower earnings growth, the average stock in the Vanguard International High Dividend Yield ETF trades for just 12 times earnings and 1.4 times book value, making it an attractive option for long-term investors.
It's worth noting that most Vanguard ETFs, even the growth-oriented ones, distribute income to shareholders. If you're looking for the highest-yielding Vanguard ETF that invests in stocks, the Vanguard International Real Estate ETF (VNQI) takes the lead with a yield of more than 4.5%.
However, the best Vanguard ETF to buy depends on one's investment goals and risk tolerance. For retirees who rely on their portfolio for income, a high-paying bond ETF might be the best choice. On the other hand, for individuals with a high-risk tolerance in their 20s, a growth-oriented Vanguard ETF like the Vanguard Growth Index Fund ETF (VUG) could be appropriate.
In conclusion, whether you're seeking high current dividend income or long-term dividend growth, Vanguard offers a range of ETFs to suit your needs. From the top-performing VYM and VIG in the U.S. market to the high-yielding VNQI in the international market, there's a Vanguard ETF for every investor.
| ETF Name | Dividend Yield | Focus | Expense Ratio | Top Holdings | |---------------------------------|----------------|-----------------------------------------|---------------|------------------------------------| | Vanguard High Dividend Yield ETF (VYM) | ~2.6% | U.S. high dividend yield companies (excl. REITs) | 0.06% | Broadcom, JPMorgan Chase, Exxon, Walmart | | Vanguard Dividend Appreciation ETF (VIG) | ~1.7% | U.S. companies with rising dividends | 0.05% | Broadcom, Microsoft, JPMorgan Chase, Apple | | Vanguard International Real Estate ETF (VNQI) | >4.5% | International real estate companies | 0.12% | Real Estate Investment Trusts (REITs) |
Remember, each investment comes with its own set of risks, and the Vanguard International High Dividend Yield ETF, like any international stock investment, carries risks such as political risks, foreign exchange risks, and tariff risks. However, despite these risks, the Vanguard International High Dividend Yield ETF looks like an excellent value for long-term investors right now.
[1] Vanguard. (n.d.). Vanguard High Dividend Yield ETF. Retrieved from Vanguard High Dividend Yield ETF
[2] Vanguard. (n.d.). Vanguard Dividend Appreciation ETF. Retrieved from Vanguard Dividend Appreciation ETF
[3] Vanguard. (n.d.). Vanguard International Real Estate ETF. Retrieved from Vanguard International Real Estate ETF
[4] Vanguard. (n.d.). Vanguard Growth Index Fund ETF. Retrieved from Vanguard Growth Index Fund ETF
- Regarding the world of finance and investing, technology plays a significant role in the management and selection of stocks, especially in ETFs like Vanguard's, which utilize technology to optimize portfolios.
- In the realm of technology-driven finance, Vanguard offers various Exchange-Traded Funds (ETFs) that cater to different investment goals, such as high dividend yields or long-term growth, and their technology-enabled portfolio management helps achieve these objectives effectively.
- Another application of technology in the finance sector is the use of data analysis, which assists in identifying trends and opportunities within the market, including high-yielding stocks such as those found in Vanguard's dividend-focused ETFs like VYM and VIG.
