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Vanguard Brings You High Dividend Yields


  • Vanguard High Dividend Yield fund is a great option for a diversified market exposure and high yields.
  • VYM has a current yield of 2.97% right now which is high for a diversified equity fund.
  • This Vanguard fund does not invest in REITs which I appreciate as I choose my own investments in the sector.
  • Vanguard High Dividend Yield ETF has correlated almost identical to the S&P 500 since its inception in 2006.

I like Vanguard funds

When looking at funds, Vanguard and Schwab are the two companies I keep an eye on. I appreciate the low expense ratios and believe they have options for most investors. Today, Vanguard brings you a high dividend yield ETF.

If an investor is seeking high yields, the Vanguard High Dividend Yield ETF (NYSEARCA:VYM) offers a fantastic option compared to most domestic equity ETFs. The yield is a reflection of the underlying stocks in the fund. Given the weak yield of bonds, VYM is a good option for investors looking to have some of their portfolio in equity.

I see VYM as an option for investors who are looking to be invested in a major domestic index, but would like to be slightly more defensive than something like the S&P 500 (SPY). VYM also has the added benefit of a materially higher dividend yield. The current yield is at 2.97% which is on the low end of the fund from what I’ve seen. This is the first time I’ve noticed the fund dip under 3%. The drop in dividend yield is because the market overall is at all-time highs. The high dividend yield makes is suitable investment for investors seeking income


Here’s the funds strategy from the Vanguard website:

I’m in favor of the exclusion of REITs. M ortgage REITs are where most of my research is done, so I like to choose my own individual investments. Over the last several months I’ve been in and out of preferred shares. Apollo Financial Real Estate (ARI) and Capstead Mortgage (CMO) are two of the companies which I owned preferred shares in and recently sold for large gains. Annaly Capital Management (NLY) had a preferred share dip into my buy zone recently

This article was written by

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Analyst’s Disclosure: I am/we are long MO, WMT, TGT, PM, FSIVX, FSITX, BMNM, WPG, GPMT, SFM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

No financial advice. Investors are expected to do their own due diligence and consult with a professional who knows their objectives and constraints. CWMF actively trades in preferred shares and may buy or sell anything in the sector without prior notice. Tipranks: Buy Target. I am also long DX-A, CBL-D, and GBLIL.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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