Most Retirees Skip Over Vanguard's $100 Billion VYM Despite Its 2.9 Percent Yield and Almost Zero Maintenance

VYM is a large, low-fee ETF that tracks the FTSE High Dividend Yield Index and holds about 540 dividend-paying stocks. Its top holdings include JPMorgan Chase, Exxon Mobil, Johnson & Johnson, Procter & Gamble, and Broadcom, with no single position dominating the portfolio. The fund’s income focus is supported by qualified dividends from large-cap value names, with price appreciation as a secondary driver. Distributions per share increased from $2.21 in 2016 to $3.51 in 2025, reflecting long-running quarterly payments and repeated dividend increases from major constituents. Total return performance has been weaker than SPY over the past decade, though recent results show a small relative improvement driven by gains in Exxon and Broadcom.

"VYM tracks the FTSE High Dividend Yield Index and charges 0.06% in annual expenses. The top positions are familiar large-cap dividend payers: JPMorgan Chase ( NYSE:JPM), Exxon Mobil, Johnson & Johnson, P&G, and Broadcom. With 540 names in the basket, no single holding exceeds roughly 4% of the fund, and the return engine is mostly qualified dividends from large-cap value names, with price appreciation as a secondary benefit."

"Income is where VYM earns its keep. Annual distributions rose from $2.21 per share in 2016 to $3.51 per share in 2025, reflecting steady growth over two decades of uninterrupted quarterly payments. That growing coupon profile is something static bond payments simply cannot match."

"Prospective buyers need to look honestly at the total return picture. Over the past decade, VYM posted a 206% total return, while SPY surged ahead at 325%. Year to date, that gap has inverted slightly, with VYM up 9.1% against the S&P 500's 8.6%. This recent outperformance was fueled by a 27% surge from Exxon and a 23% move from Broadcom."

"The trade VYM offers is straightforward: a lower headline yield in exchange for spreading income across about 540 stocks, which is often the right answer for someone who wants set-and-forget income."

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