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Vanguard’s dividend ETF lineup spans lower-yield growth to higher income

VIG targets dividend growers with 0.04% expenses and a 1.47% yield, while VYM focuses on above-average U.S. dividends and yields about 2.2%.

Reported · Written up by our desk · ETFs

Vanguard’s exchange-traded fund lineup gives investors three main ways to access dividend-paying stocks, with its dividend ETFs VIG and VYM standing out for their different income profiles and portfolio approaches, according to MarketBeat Ratings.

Vanguard Dividend Appreciation ETF VIG tracks the S&P U.S. Dividend Growers Index, aiming at companies with a record of increasing dividend payments over time. The fund holds index stocks in line with their weightings, runs a 0.04% expense ratio, and currently yields 1.47%, or $3.58 per share annually.

VIG screens for Dividend Achievers and Dividend Contenders, defined as firms with at least 10 consecutive years of increasing annual regular dividends, and it excludes the top 25% highest-yielding stocks to avoid taking on higher risk. In its largest allocation, Broadcom holds a 4.52% weighting, and the fund is also described as offering exposure to companies such as Johnson & Johnson.

By contrast, Vanguard High Dividend Yield ETF VYM is designed to track the FTSE High Dividend Yield Index, targeting U.S. companies forecast to pay above-average dividends. The fund’s largest sector exposure is financials at 21.8%, with tech at 17% and healthcare at 13.1%, and it currently yields 2.2%, or $3.63 per share annually.

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