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Market Volatility Bulletin: Focus On Vanguard High Dividend Yield ETF

Published Tue, 22 Oct 2019 16:36:18 -0400 on Seeking Alpha

ETF Intro
Note: All visuals generated by author using data from Yahoo! Finance unless otherwise specified.

SA Essential

Morningstar
The Vanguard High Dividend Yield ETF - VYM - holds a sector-diverse basket of US-domiciled companies. Current yield on the shares is 3.15%, with a meager expense ratio of only 6 basis points per annum.
Thoughts on Volatility

SA: Tuesday morning
Readers of SA were alerted this morning on the strong negative move in blue chip stalwart McDonald's (MCD).
The Dow (DIA), which is composed of 30 large cap holdings, is flat in the Tuesday morning session. The same can be said for VYM, though not for lack of holdings. The fund's allocation to 406 stocks makes for a pretty diverse collection of companies. Granted, 27% of those assets were placed in the top 10 holdings as of Sept. 30, but that still leaves quite a lot of room for a block of other stocks to make a difference.

The overall year-by-year volatility pattern for VYM is quite similar to what you'd see on the mainline US indexes, such as the SPY. 2011 stands out as the most volatile for daily return distributions (relatively flat and wide density), whereas 2017 stands out as almost preternaturally narrow in distribution.
2019 has been pretty average on the whole, playing out similarly from a return distribution standpoint to 2013 and 2018. The major idea, however, is that the fund doesn't consistently behave in some particular way.
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Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST 272.32   0.0 0.00 5.67 2.10
SPDR S&P 500 ETF 301.29   0.0 0.00 5.42 1.82

SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST - DIA
SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST - DIA  


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There's Almost Always A Buying Opportunity After An Inverted Yield Curve
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Fading Risk Aversion Will Boost Bond Yields
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