Both the Vanguard High Dividend Yield ETF and the iShares Core High Dividend ETF focus on U.S. companies distributing significant cash to shareholders. However, they take different approaches. Generally, investors might opt for the Vanguard fund, which aims for broad diversification across around 600 companies, or the iShares fund, which is more selective with a high-conviction focus in a smaller group of stocks.
Snapshots (cost and size)
| metric | HDV | VYM |
|---|---|---|
| Publisher | ishares | vanguard |
| expense ratio | 0.08% | 0.04% |
| 1 year returns (as of May 18, 2026) | 22.9% | 23.6% |
| dividend yield | 2.9% | 2.3% |
| beta | 0.37 | 0.73 |
| parrot | $13.6 billion | $77.5 billion |
Beta indicates how much a fund’s price fluctuates compared to the S&P 500 and is calculated using five years of monthly returns. The one-year return reflects the total return for the next 12 months. Dividend yield is based on the trailing 12-month distribution yield.
Vanguard’s expense ratio is 0.04%, which is notably lower than iShares’ 0.08%, making it a more cost-effective option. Yet, iShares boasts a higher dividend yield of 2.9% compared to Vanguard’s 2.3%.
Comparing performance and risk
| metric | HDV | VYM |
|---|---|---|
| Maximum drawdown (5 years) | (15.4%) | (15.9%) |
| $1,000 growth in 5 years (total return) | $1,617 | $1,704 |
what’s inside
The Vanguard High Dividend Yield ETF contains about 600 stocks, primarily in the financial services (20.2%), technology (14.8%), and industrials (14.2%) sectors. Major holdings include Broadcom at 8%, JP Morgan Chase at 3.33%, and Exxon Mobil at 2.7%. Established in 2006, this fund provides a straightforward way to focus on stocks with promising dividend yields.
On the other hand, the iShares Core High Dividend ETF features a more focused portfolio of 74 stocks, leaning towards the Consumer Defense (25%), Energy (22%), and Healthcare (17%) sectors. Its top assets are ExxonMobil at 8.5%, Chevron at 6.3%, and Johnson & Johnson at 5.7%. Since its inception in 2011, this fund’s trailing 12-month dividend stands at $0.79 per share. Vanguard offers broader exposure, while iShares concentrates on high-dividend stocks in the U.S.
What it means for investors
Investing in dividend stocks can be an effective way to grow wealth while diversifying. Earnings from dividends can be reinvested for compound growth, used to purchase additional stocks, or converted into cash for daily expenses. By investing in dividend-focused ETFs, investors can enjoy benefits without the hassle of picking and monitoring individual stocks.
The Vanguard High Dividend Yield ETF and iShares Core High Dividend ETF have shown similar total returns and maximum drawdowns over the past year and five years. The choice between them often comes down to fees and investment strategy. VYM tracks the FTSE High Dividend Yield Index, focusing on a wider market with lower fees compared to HDV. The latter, however, offers higher dividends through a more concentrated portfolio, and tracks a narrower selection.
Should you buy Vanguard High Dividend Yield ETF stock now?
Before making a decision about purchasing shares in the Vanguard High Dividend Yield ETF, consider some factors. The Motley Fool Stock Advisor team has identified a selection of stocks they believe are currently more promising investments than this ETF. These choices have the potential for substantial returns in the near future.
For example, considering historical performance, if you had invested $1,000 in recommendations made by Netflix, you would see that it has grown significantly over the years. The same goes for Nvidia, which has seen incredible gains since that recommendation.
It’s important to note that the overall average return from Stock Advisor stands at 993%, far outpacing the S&P 500’s 208%. So, it might be wise to look at the recent top stocks before making any ETF purchases.
