What Is VYM?
The largest U.S. high-dividend ETF — 570 blue-chip stocksfiltered by yield, weighted by market cap.
$85B in assets · 0.06% fee · ~2.4% yield · Quarterly dividends
$10,000 in VTI ten years ago turned into $37,899. That same $10,000 in the VYM ETF? $29,235. An $8,663 gap — and growth investors love pointing that out.
But zoom into 2022, and VYM barely flinched. It lost 0.46% while VTI dropped 19.51%. That single year nearly erased a decade of underperformance over the following five-year window. The 5-year gap between VYM and VTI as of 2025? Just $314.
VYM doesn’t try to beat the total market. It filters for the highest-dividend-paying half of U.S. large caps — roughly 570 stocks — and weights them by market cap. The result is a portfolio tilted toward financials, healthcare, and energy instead of mega-cap tech. Whether that tilt costs you or protects you depends entirely on the decade you pick.
I ran a full 10-year backtest with independent calculations. The VYM ETF’s real story is more nuanced than either its critics or fans admit.
📍 VYM Dividend Hub — Related Reviews
- SCHD ETF Review — VYM’s biggest dividend rival
- JEPI ETF Review — Active income alternative
- VTI ETF Review — The total market benchmark
- Best ETFs for Beginners — Where VYM fits in a starter portfolio
VYM ETF $10K Growth Test — Impact First
Total return matters more than yield in isolation. I calculated VYM’s growth using Yahoo Finance annual returns with dividends reinvested, then compared it to VTI — the broadest U.S. stock market benchmark.
5-Year Growth (2021–2025)
| Metric | VYM | VTI |
|---|---|---|
| $10K Final Value | $18,171 | $18,485 |
| CAGR | 12.69% | 13.07% |
| Gap | $314 (VTI leads) | |
Three hundred fourteen dollars. Over five years, VYM essentially matched the total market — while paying roughly double the dividend yield. The 2022 bear market is the reason: VYM held its ground while VTI cratered.
10-Year Growth (2016–2025)
| Metric | VYM | VTI |
|---|---|---|
| $10K Final Value | $29,235 | $37,899 |
| CAGR | 11.32% | 14.25% |
| Gap | $8,663 (VTI leads) | |
$10,000 → 10 Years Later
Gap: $8,663 · VTI leads by 29.6% over 10 years
Over ten years, the gap widens to $8,663. Most of that damage came from 2020’s pandemic rally (+1.14% vs +21.03%) and 2023’s growth rebound (+6.57% vs +26.05%) — two years where VYM’s value tilt worked against it.
VYM ETF Risk Profile — The Price of Income
VYM’s total return trails VTI. But risk-adjusted, the picture shifts. Value and dividend stocks tend to fall less in downturns — and 2022 proved that in dramatic fashion.
| Risk Metric | VYM | VTI |
|---|---|---|
| Max Drawdown (Since Inception) | -56.98% | -55.45% |
| Annualized Volatility | 14.96% | 15.40% |
| Beta (5Y) | 0.74 | 1.00 |
| Sharpe Ratio | 0.58 | 0.96 |
| Correlation (VYM ↔ VTI) | 0.90 | |
That 0.74 beta stands out. For every 1% the market moves, VYM historically moves just 0.74%. During the 2022 downturn, that lower beta translated into a 19-percentage-point cushion over VTI.
The max drawdown numbers (-56.98% for VYM vs -55.45% for VTI) both trace back to the 2008–2009 financial crisis, when dividend-heavy banks got hammered. VYM’s financial sector tilt — its largest allocation — made it slightly more vulnerable during that specific crash.
VYM ETF Year-by-Year Total Returns (2016–2025)
| Year | VYM | VTI | Difference |
|---|---|---|---|
| 2016 | +17.05% | +12.83% | +4.22% |
| 2017 | +16.42% | +21.21% | -4.79% |
| 2018 | -5.91% | -5.21% | -0.70% |
| 2019 | +24.07% | +30.67% | -6.60% |
| 2020 | +1.14% | +21.03% | -19.89% |
| 2021 | +26.21% | +25.67% | +0.54% |
| 2022 | -0.46% | -19.51% | +19.05% |
| 2023 | +6.57% | +26.05% | -19.48% |
| 2024 | +17.59% | +23.81% | -6.22% |
| 2025 | +15.42% | +17.10% | -1.68% |
VYM vs VTI — Who Won Each Year?
VYM won 3 of 10 years — but 2022 alone nearly offset the entire 5-year gap
VYM won 3 out of 10 years — 2016, 2021, and 2022. But look at the magnitude of those wins. The 2022 outperformance of +19.05% was VYM’s defining moment: a near-perfect hedge against the rate-driven sell-off that crushed growth stocks.
The flip side is 2023. When AI-driven growth roared back, VYM’s +6.57% couldn’t keep up with VTI’s +26.05%. That -19.48% gap almost perfectly mirrors the 2022 advantage. Dividend investing giveth, and growth rallies taketh away.
VYM ETF Top 10 Holdings
| # | Company | Ticker | Weight | Sector |
|---|---|---|---|---|
| 1 | Broadcom | AVGO | 6.95% | Technology |
| 2 | JPMorgan Chase | JPM | 3.63% | Financials |
| 3 | Exxon Mobil | XOM | 2.71% | Energy |
| 4 | Johnson & Johnson | JNJ | 2.48% | Healthcare |
| 5 | Walmart | WMT | 2.35% | Consumer Defensive |
| 6 | AbbVie | ABBV | 1.79% | Healthcare |
| 7 | Home Depot | HD | 1.69% | Consumer Cyclical |
| 8 | Procter & Gamble | PG | 1.62% | Consumer Defensive |
| 9 | Bank of America | BAC | 1.56% | Financials |
| 10 | Chevron | CVX | 1.50% | Energy |
| Top 10 Total | 26.28% | |||
Broadcom at 6.95% is the elephant in the room. A semiconductor company commanding the top spot in a “high dividend yield” fund wasn’t always the case — AVGO’s surging stock price (driven by AI demand) inflated its market-cap weight. It now accounts for nearly a quarter of VYM’s top 10 concentration alone.
Beyond Broadcom, the list reads like a who’s who of American blue chips: JPMorgan, Exxon, J&J, Walmart. These are companies that have paid dividends for decades. The top 10 total of 26.28% is moderate — concentrated enough to matter, diversified enough to absorb a single-stock blow.
VYM ETF Sector Allocation
| Sector | VYM | VTI (approx.) |
|---|---|---|
| Financial Services | 20.86% | ~13% |
| Technology | 16.05% | ~34% |
| Healthcare | 12.94% | ~12% |
| Industrials | 12.17% | ~10% |
| Consumer Defensive | 11.31% | ~5% |
| Energy | 9.20% | ~4% |
| Consumer Cyclical | 7.02% | ~11% |
| Utilities | 5.77% | ~2% |
| Other (Comm, Materials, RE) | 4.69% | ~9% |
VYM Sector Breakdown — Visual
This is why VYM and VTI perform so differently. VTI allocates roughly 34% to technology — VYM gives it just 16%. Instead, VYM overweights financials (21%), consumer staples (11%), and energy (9%). These are sectors that generate cash today rather than promising growth tomorrow.
In rising-rate environments like 2022, financials and energy thrive while growth tech suffers. In AI-driven bull markets like 2023–2024, the opposite happens. Owning VYM is a structural bet on value stocks paying real dividends — not a bet against the market itself.
VYM ETF Dividend & Cost Analysis
| Metric | VYM | VTI |
|---|---|---|
| Dividend Yield (TTM) | ~2.4% | ~1.2% |
| Distribution Frequency | Quarterly | Quarterly |
| Consecutive Dividend Growth | 15 years | N/A (index) |
| Expense Ratio | 0.06% | 0.03% |
| Annual Cost on $100K | $60 | $30 |
VYM yields roughly double what VTI pays. On a $100,000 portfolio, that translates to approximately $2,400/year in dividend income from VYM versus $1,200 from VTI. For retirees or income-focused investors, that difference is meaningful — it could cover a monthly utility bill.
The 0.06% expense ratio was already low, but Vanguard announced a fee cut in February 2026 that brought VYM’s new rate down to 0.04%. On $100,000, that’s $40/year — a rounding error that won’t influence any rational investment decision.
One note on qualified dividends: most of VYM’s distributions qualify for the lower long-term capital gains tax rate (0%, 15%, or 20% depending on your bracket), which gives it a tax edge over income-focused alternatives like JEPI that distribute ordinary income.
Who Should Consider the VYM ETF?
✅ Strong Fit
Income-focused investors who want quarterly cash flow from blue-chip U.S. stocks. Retirees drawing from their portfolio. Investors who prefer lower volatility and a 0.74 beta cushion during sell-offs.
🤔 Worth Considering
Long-term investors who want broad U.S. equity exposure with a value tilt. Those building a VTI + VYM or VOO + VYM combination for balance between growth and income.
⚠️ Think Twice
Growth-first investors chasing maximum total return. Those who already hold SCHD — the overlap is significant. Investors with a 20+ year horizon who can stomach volatility for higher long-term gains.
VYM ETF vs Competitors — Quick Comparison
| Feature | VYM | SCHD | VIG |
|---|---|---|---|
| Index | FTSE High Div Yield | Dow Jones US Div 100 | S&P Div Growers |
| Expense Ratio | 0.06% | 0.06% | 0.06% |
| Dividend Yield | ~2.4% | ~3.5% | ~1.6% |
| Holdings | ~570 | ~100 | ~340 |
| Strategy | High current yield | Dividend quality | Dividend growth |
| Top Sector | Financials (21%) | Energy (~20%) | Technology (~22%) |
VYM casts the widest net — 570 stocks versus SCHD’s 100. That broader diversification comes with a trade-off: lower yield than SCHD (2.4% vs 3.5%) and less rigorous quality screening. VIG takes a different approach entirely, targeting companies that have grown their dividends rather than paying the highest current yield.
For investors who want the highest income today, SCHD’s concentrated quality approach has historically delivered more cash. For those who want broad dividend exposure with lower single-stock risk, VYM’s scale is harder to replicate.
The Verdict on VYM ETF
VYM isn’t the highest-yielding dividend ETF, and it won’t beat a total market fund over extended bull runs. Its 10-year CAGR of 11.32% versus VTI’s 14.25% makes that clear. But raw return isn’t the only metric that matters.
Where the VYM ETF earns its place is in resilience. The 2022 bear market — VTI down 19.51%, VYM down 0.46% — showed what a value-and-income tilt actually does when sentiment shifts. Over the last five years, that single cushion year compressed the total return gap to just $314 on a $10,000 investment.
For investors who need income today, prefer lower volatility, or want a counterweight to growth-heavy portfolios, VYM’s data supports its role.
Fund Specs — Quick Reference
| Full Name | Vanguard High Dividend Yield Index Fund ETF |
| Ticker | VYM |
| Index | FTSE High Dividend Yield Index |
| Expense Ratio | 0.06% (0.04% effective Feb 2026) |
| AUM | ~$85B |
| Holdings | ~570 |
| Inception Date | November 10, 2006 |
| Dividend Yield (TTM) | ~2.4% |
| Distribution | Quarterly |
| P/E Ratio | ~17.1 |
| Turnover Rate | ~11% |
| Issuer | Vanguard |
VYM ETF — Frequently Asked Questions
Is VYM a good ETF for retirement income?
VYM has delivered quarterly dividends for over 18 years and increased its annual payout for 15 consecutive years. Its ~2.4% yield on a $500,000 portfolio generates roughly $12,000/year in income — though past distributions don’t guarantee future payments.
What is the VYM ETF expense ratio?
The prospectus expense ratio is 0.06%, though Vanguard reduced it to 0.04% effective February 2026. On a $100,000 investment, that’s $40–$60 per year depending on which rate has been reflected in your brokerage account.
VYM vs SCHD — which dividend ETF is better?
SCHD screens for dividend quality (growth history, cash flow, balance sheet strength) across roughly 100 stocks. VYM simply selects the highest-yielding half of U.S. large caps — about 570 stocks. SCHD has historically offered a higher yield (~3.5% vs ~2.4%), while VYM provides broader diversification. Many dividend investors hold both.
Does VYM include tech stocks?
Yes. Technology makes up about 16% of the VYM ETF, with Broadcom (AVGO) as the fund’s largest holding at 6.95%. However, this is roughly half the ~34% tech weight found in broad market funds like VTI.
How often does VYM pay dividends?
VYM distributes dividends quarterly — typically in March, June, September, and December. The exact amounts vary each quarter based on the dividends collected from the fund’s underlying holdings.
📚 Dividend & Income ETF Hub
This article is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results. Always do your own research or consult a licensed financial advisor before making investment decisions. Data sourced from Yahoo Finance, PortfoliosLab, Vanguard, and independent calculations. Holdings and sector weights as of early 2026 and are subject to change.