{"id":278,"date":"2022-01-05T21:35:15","date_gmt":"2022-01-05T21:35:15","guid":{"rendered":"https:\/\/investorimpactlab.com\/?p=278"},"modified":"2022-01-05T22:10:45","modified_gmt":"2022-01-05T22:10:45","slug":"vig-vs-vym","status":"publish","type":"post","link":"https:\/\/investorimpactlab.com\/vig-vs-vym\/","title":{"rendered":"VIG vs. VYM: Which is the Better Vanguard Dividend ETF?"},"content":{"rendered":"\n
From the launch in 1993, exchange-traded funds have emerged as an immensely popular mode of investing. Most people looking for passive investment choices opt for an ETF. <\/p>\n\n\n\n
Vanguard is firmly established as a popular and cost-effective fund manager with good reason. The majority of their funds are strong performers and have the lowest fees in the sector. The two funds we are evaluating today are run by Vanguard and may have a similar low-cost structure that Vanguard is renowned for. However, that is the only commonality between these two funds. <\/p>\n\n\n\n
The stock market is designed in such a way that two ETFs managed by one person will yield differing results. We are assessing two dividend funds managed by Vanguard. These are Vanguard\u2019s ETFs; Dividend Appreciation (VIG) and High Dividend Yield (VYM). Let us see under what criteria they are eligible for addition to a portfolio?<\/p>\n\n\n\n
Key Takeaways<\/h2>\n\n\n\n
VIG and VYM are major dividend-oriented ETFs offered by Vanguard.<\/li>
VIG holds dividend growth stocks. These are stocks that have a record of offering rising dividends for a decade at least.<\/li>
VYM holds shares that offer higher than average dividends. <\/li>
From its launch in 2006, VIG has outperformed VYM on almost all key performance metrics.<\/li>
VYM has a history of underperforming the S&P 500 index.<\/li>
VYM has additional volatility risk compared to VIG<\/li><\/ul>\n\n\n\n\n\n
VIG vs. VYM: Summary<\/h2>\n\n\n\n
The Vanguard Dividend Appreciation ETF (VIG) comprises dividend growth stocks. These are businesses with a track record of offering increasing dividends over time. The VIG links the NASDAQ US Dividend Achievers Select Index. This index was previously called the Dividend Achievers Select Index. The VIG was launched in 2006 and is holds companies that have a record of growing dividends over the past decade.<\/p>\n\n\n\n
The Vanguard High Dividend Yield ETF (VYM) links the FTSE High Dividend Yield Index. Its holdings are selected from the FTSE All-World Index, except for the listed REITs. The method of selection is ranking by forecasted dividend yield. <\/p>\n\n\n\n
VIG vs. VYM: Composition<\/h2>\n\n\n\n
The Vanguard Dividend Appreciation ETF (VIG) comprises companies with a track record of offering rising dividends over time. The VIG links the NASDAQ US Dividend Achievers Select Index. It holds companies with large market caps and a mix of growth and value stocks.<\/p>\n\n\n\n
The VYM links the FTSE High Dividend Yield Index based on the FTSE All-World Index, excluding the REITs on the index. <\/p>\n\n\n\n
The VIG consists of $ 77 Bn in assets, spread over about 270 holdings in the US Large Blend segment. 48% of the funds holdings are in the large-cap value segment, while 39% are in the large-cap growth segment. Approximately 12% are in the medium-term US Treasuries.<\/p>\n\n\n\n
Holdings are spread over 18% in financial services,17% in industrials, 16% in technology, and 14 % in consumer defensive and healthcare.<\/p>\n\n\n\n
VYM has $ 50 Bn in assets, spread over about 400 holdings in the US Large value segment. 88% of the fund\u2019s holdings are in the large-cap value segment, while 3% are in the large-cap growth segment. <\/p>\n\n\n\n
Its holdings are spread over 23% in financial services,17% in industrials, 14% in consumer defensive, 13% in healthcare, and 10% in industrials.<\/p>\n\n\n\n