VYM

Vanguard High Dividend Yield Index ETF (VYM) is an exchange-traded fund that seeks to track the performance of an index composed of U.S. companies with high dividend yields. The ETF is managed by Vanguard and trades under the ticker VYM on NYSE Arca.

Classified as a U.S. equity ETF focused on dividends, VYM aims to reflect, before fees and expenses, the aggregated performance of the equities included in its benchmark index. 

To achieve this objective, the fund employs a passive management strategy, maintaining a portfolio that seeks to replicate the composition and weighting of a high dividend yield index.

VYM’s benchmark index consists of U.S. equities with above-average dividend yields, weighted by float-adjusted market capitalization. 

Diversification and sector exposure

VYM provides exposure to the U.S. equity market with an emphasis on dividend income, including companies across sectors such as:

• Financials.

• Consumer staples.

• Health care.

• Energy.

• Industrials.

• Information technology.

Structure and costs

Shares of VYM are traded on the secondary market, while creation and redemption of shares are carried out by authorized participants, a mechanism that helps keep the ETF’s market price close to its net asset value (NAV).

The fund features a low and competitive expense ratio, typical of Vanguard’s passive ETFs, and does not charge a performance fee. VYM makes periodic income distributions, derived from dividends paid by the stocks in its portfolio. The ETF has a single share class and trades exclusively under the ticker VYM.

History and evolution of the ETF

The Vanguard High Dividend Yield Index ETF was launched in 2006, amid growing investor interest in income-oriented strategies within the U.S. equity market.

Since its inception, VYM has been widely used by institutional and individual investors seeking exposure to high-dividend U.S. companies, integrating dividend income strategies into diversified portfolio allocations.

Between 2020 and 2024, the ETF reflected movements in U.S. equity markets in response to macroeconomic factors, shifts in monetary policy, and evolving investor demand for yield, while maintaining high liquidity and broad adoption as a tool for dividend-focused equity exposure.