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VYM Is A Low Risk Dividend Fund That Offers Decent Returns

Published Wed, 17 Jul 2019 12:25:15 -0400 on Seeking Alpha

ETF Overview
Vanguard High Dividend Yield Index Fund (VYM) focuses on large cap high-yield dividend stocks in the U.S. This fund tracks the FTSE High Dividend Yield Index. The fund constructs its portfolio based on dividend yield and market capitalization. Its market-cap weight approach is advantageous as it helps to minimize the risk of dividend cuts in its portfolio of stocks considerably. VYM has lower exposure to higher growth technology stocks than the S&P 500 Index. On the other hand, it has more exposure to defensive stocks than the broader index. For conservative investors, VYM appears to be a good choice as it offers high dividend yield than the S&P 500 Index. Its performance was also decent, though slightly lower than the S&P 500 Index’s return.

Data by YCharts
Fund Analysis
Construction of the fund’s portfolio cannot guarantee no dividend cuts
VYM selects funds based only on the stocks’ past performance. The fund’s portfolio is constructed by the following two criteria: dividend yield and market capitalization. The fund first ranks U.S. dividend paying stocks from the FTSE All-World Index (excluding REITs). Its dividend yield is ranked based on I/B/E/S forecasts. For more information about I/B/E/S forecasts, please read here. The fund assigns weightings to these stocks based on their market capitalizations.
This selection criteria means that the emphasis is on dividend yield. As we know, companies that have higher dividend... Read more


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