VIG vs VYM: Vanguard Dividend Appreciation ETF vs Vanguard High Dividend Yield ETF Comparison
Compare VIG (Vanguard Dividend Appreciation ETF) and VYM (Vanguard High Dividend Yield ETF) by expense ratio, dividend yield, holdings, and more.
Key Differences
- 1Dividend yield: VYM 2.75% vs VIG 1.68%
- 2Holdings: VIG 289 vs VYM 537
Conclusion
VYM has an overall advantage with higher dividend yield (2.75% vs 1.68%). However, VIG also offers Continuous dividend growth, making it worth considering depending on your portfolio goals.
| Category | VIG | VYM |
|---|---|---|
| Fund Name | Vanguard Dividend Appreciation ETF | Vanguard High Dividend Yield ETF |
| Current Price | ... | ... |
| Category | Dividend ETFs | Dividend ETFs |
| Expense Ratio | 0.06% | 0.06% |
| Dividend Yield | 1.68% | 2.75% |
| Holdings | 289 | 537 |
VIG Top Holdings
- 1. Microsoft
- 2. Apple
- 3. Broadcom
- 4. JPMorgan
- 5. UnitedHealth
VYM Top Holdings
- 1. Broadcom
- 2. JPMorgan
- 3. Exxon Mobil
- 4. Procter & Gamble
VIG Features
- •Dividend growth
- •High-quality companies
- •Low expense ratio
- •Stability
VYM Features
- •High dividend
- •Large-cap stocks
- •Diversified investment
- •Low expense ratio
Pros & Cons
VIG
Advantages
- ✓ Continuous dividend growth
- ✓ Quality company selection
- ✓ Inflation hedge
Disadvantages
- ⚠ Underperformance vs. growth stocks
- ⚠ Interest rate sensitive
- ⚠ Sector bias
VYM
Advantages
- ✓ High dividend income
- ✓ Stable companies
- ✓ Low volatility
Disadvantages
- ⚠ Limited growth potential
- ⚠ Interest rate sensitive
- ⚠ Sector bias
Investment Strategy
Best For: VIG
Core dividend strategy; hold long-term; consider combining with SCHD
Best For: VYM
Suitable for income investors; diversify with SCHD
Detailed Analysis
VIG (Vanguard Dividend Appreciation ETF) and VYM (Vanguard High Dividend Yield ETF) Both belong to the Dividend ETFs category, covering a similar investment area but with different strategies. VIG: Vanguard Dividend Appreciation ETF (VIG) is an exchange-traded fund that provides investors with exposure to dividend-paying equities. It carries an expense ratio of 0.06%. The fund offers a dividend yield of approximately 1.68%. The portfolio holds 289 securities. With an expense ratio of 0.06% and dividend yield of 1.68%, its top holdings include Microsoft, Apple, Broadcom. Key features include Dividend growth, High-quality companies, with Continuous dividend growth being a major advantage. VYM: Vanguard High Dividend Yield ETF (VYM) is an exchange-traded fund that provides investors with exposure to dividend-paying equities. It carries an expense ratio of 0.06%. The fund offers a dividend yield of approximately 2.75%. The portfolio holds 537 securities. With an expense ratio of 0.06% and dividend yield of 2.75%, top holdings include Broadcom, JPMorgan, Exxon Mobil. Notable features are High dividend, Large-cap stocks, with High dividend income as a core strength.
Investment Recommendation
VIG is suitable for Core dividend strategy; hold long-term; consider combining with SCHD, while VYM is suitable for Suitable for income investors; diversify with SCHD. Since both ETFs are in the same category, choosing one for your portfolio is more efficient. Base your decision on expense ratio, liquidity, and issuer preference. For beginners, we recommend a core-satellite strategy: choose a low-cost, well-diversified ETF as your core holding, and allocate the rest to satellite positions.
Key Summary
Both VIG and VYM are excellent ETFs for their respective investment objectives. The key is to choose based on your investment goals, time horizon, and risk tolerance. Rather than focusing on a single metric (dividend yield, fees, etc.), evaluate from a holistic portfolio perspective. Use our rebalancing calculator to easily determine the optimal asset allocation including both ETFs.
VIG vs VYM Investment Guide
Both VIG and VYM are popular US ETFs, but they differ in investment strategy and portfolio role. VIG has an expense ratio of 0.06%, while VYM charges 0.06%, Both ETFs share the same cost structure. In terms of dividend yield, VIG offers 1.68% while VYM offers 2.75%, making VYM the better choice for income investors.
When choosing between the two, consider your investment goals, time horizon, and risk tolerance. If long-term growth is your priority, favor the ETF with lower fees and broader diversification. If you need steady cash flow, the higher-yielding ETF may be more suitable. You can also hold both in your portfolio for a complementary approach.
Regardless of which ETF you choose, maintaining your target allocation through regular rebalancing is key to long-term performance. Review your portfolio quarterly or semi-annually, and adjust if weights have drifted significantly. Our rebalancing calculator can automatically determine the buy/sell quantities for each holding.
5 Things to Check When Comparing ETFs
Expense Ratio: Even a 0.1% difference in fees can translate to thousands of dollars over long-term investing. When two ETFs track a similar index, the lower-cost option has the edge.
Tracking Index & Holdings: Even ETFs in the same category may track different indices. Review the top holdings and sector weights to find the best fit for your investment goals.
Dividend Policy: Compare dividend frequency (monthly vs quarterly), yield, and dividend growth rate. Monthly dividend ETFs may be preferable if you need regular cash flow.
Trading Volume & Liquidity: Sufficient daily trading volume ensures you can buy and sell at fair prices. Low-volume ETFs may have wider bid-ask spreads, increasing your trading costs.
Portfolio Role: Determine whether the ETF serves as a core or satellite holding in your portfolio, and size your position accordingly.