The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) made its debut on 11/10/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Vanguard, VYM has amassed assets over $73.43 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.04% for VYM, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.32%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
VYM's heaviest allocation is in the Financials sector, which is about 19.4% of the portfolio. Its Information Technology and Healthcare round out the top three.
When you look at individual holdings, Broadcom Inc (AVGO) accounts for about 7.57% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).
Performance and Risk
Year-to-date, the Vanguard High Dividend Yield Index Fund ETF Shares has added roughly 5.01% so far, and it's up approximately 19.09% over the last 12 months (as of 03/11/2026). VYM has traded between $114.78 $156.50 in this past 52-week period.
The fund has a beta of 0.75 and standard deviation of 12.57% for the trailing three-year period, which makes VYM a medium risk choice in this particular space. With about 571 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 Value Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $83.85 billion in assets, Vanguard Value Index Fund ETF Shares has $167.63 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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Vanguard High Dividend Yield Index Fund ETF Shares (VYM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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