The Vanguard High Dividend Yield ETF (NYSEARCA:VYM) is, according to ETF.com, the most popular dividend-focused ETF. I have been putting off looking at it, in my search for investments to replace the income I used to get from CDs, because I have learned, the hard way, that "high dividend" often means "high risk." I'm looking for safety along with yield.
For Actual High Yield You Will Have to Go Elsewhere
But a quick look at VYM's summary page told me that despite its name, VYM's dividend could only be considered "high" in the strange Alice in Wonderland interest rate rabbit hole we find ourselves in.
VYM's trailing 12 month dividend yield is variously reported at 3.48% (Seeking Alpha) and 3.55% (Morningstar). Vanguard reports its SEC Yield as of Sept 30 as 3.59%. This SEC yield is actually lower than the 3.85% SEC yield of the Schwab U.S. Dividend Equity ETF (SCHD), which I wrote about last month in another article, which does not market itself as a high dividend ETF.
Another competitor, iShares Core High Dividend ETF (HDV), does not report an SEC Yield, but its 12 month trailing yield is higher at 4.25%. iShares Select Dividend ETF (DVY) also has a higher 12 month trailing yield at 4.39%
The equal weighted Invesco S&P Ultra Dividend Revenue ETF (RDIV) has an even higher SEC Yield at 5.33% with a 12 month trailing yield of 4.85%.
Only dividend growth oriented ETFs like the SPDR® S&P Dividend ETF (SDY) have lower SEC yields. SDY's is 3.0% and it reports a 12 month trailing yield of 3.06%.
The graph below displays the relative performance of these funds over the past three years. I have included the Vanguard S&P 500 Index ETF (VOO) for reference, to make it clear how all these dividend-focused ETFs
