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Dividend and bond ETFs VYM, VCIT, and AGG target income with low fees
VYM charges a 0.04% annual fee and yields 2.20%, while VCIT and AGG provide diversified exposure to mostly investment grade corporate bonds and U.S. aggregate bonds, respectively.
MarketBeat Ratings highlights three low-cost exchange traded funds aimed at investors seeking income without paying for high management fees. The picks are the Vanguard High Dividend Yield ETF (VYM), the Vanguard Intermediate-Term Corporate Bond ETF (VCIT), and the iShares Core U.S. Aggregate Bond ETF (AGG), which the outlet says combine broad diversification with expense ratios as low as 0.03% to help support distributions.
VYM is positioned as a stock ETF that seeks dividend income through exposure to more than 600 large cap U.S. value companies, including dividend payers such as Johnson & Johnson and Procter & Gamble. MarketBeat Ratings notes VYM has a 0.04% annual fee, about $83 billion in managed assets, and a dividend yield of 2.20%, and it reported year to date returns of 14%.
For investors looking to add bond income alongside income stocks, VCIT is described as a way to increase bond exposure outside of Treasuries. MarketBeat Ratings says VCIT holds a portfolio of mostly investment grade corporate bonds linked to companies with strong financial health across multiple sectors.
AGG is also framed as a broad diversified bond option, with MarketBeat Ratings saying it holds a basket of U.S. bonds with a focus distinct from VCIT. The outlet characterizes AGG and VCIT as bond funds that both aim to deliver distributions, while their underlying bond focuses differ.