Should Vanguard High Dividend Yield ETF (VYM) Be on Your Investing Radar?

The Vanguard High Dividend Yield ETF (VYM) was launched on 11/10/2006, 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 $61.91 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueCompanies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.CostsSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.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 2.63%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Financials sector--about 24% of the portfolio. Consumer Staples and Industrials round out the top three.Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 3.98% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).Performance and RiskVYM 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 4.25% so far this year and is up about 20.01% in the last one year (as of 01/31/2025). In the past 52-week period, it has traded between $112.11 and $134.74.The ETF has a beta of 0.84 and standard deviation of 14.03% for the trailing three-year period, making it a medium risk choice in the space. With about 542 holdings, it effectively diversifies company-specific risk.AlternativesVanguard High Dividend Yield ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VYM is an outstanding 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 $67.43 billion in assets, Vanguard Value ETF has $134.07 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.Bottom-LineRetail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard High Dividend Yield ETF (VYM): ETF Research Reports JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks