Dividend investing is an easy way to earn regular income. Many investors choose steady dividend-paying companies, and Vanguard ETFs offer a low-cost option to get this income with diversification and lower risk. Using TipRanks’ Best Vanguard ETFs tool, three income-focused options stand out: Vanguard International High Dividend Yield ETF (VYMI), Vanguard High Dividend Yield Index ETF (VYM), and Vanguard Dividend Appreciation ETF (VIG).
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Let’s take a look at these ETFs in detail.
Vanguard International High Dividend Yield ETF (VYMI)
The Vanguard International High Dividend Yield ETF (VYMI) focuses on dividend-paying stocks in foreign developed and emerging markets, offering investors global income opportunities. It tracks the FTSE All-World ex US High Dividend Yield Index, offering a way to earn a steady income while diversifying globally.
VYMI pays a dividend of $0.708 per share, reflecting a 3.41% yield.
Moving to holdings, VYMI has 1,582 stocks with total assets worth $19.04 billion. Its top 3 holdings are Novartis (NVS), HSBC Holdings (HSBC), and Roche Holding (RHHBY).
Vanguard High Dividend Yield Index ETF (VYM)
The Vanguard High Dividend Yield ETF is a key part of Vanguard’s dividend lineup. It follows a straightforward approach by investing in a wide range of stocks that pay higher-than-average dividends.
VYM pays a quarterly dividend of $0.862 per share, reflecting a 2.25% yield. A key advantage of this fund is its market-cap weighting, which gives more weight to larger, more stable companies. Unlike yield-weighted ETFs that can chase risky high dividends, this approach offers steadier and more reliable income, even if the yield is slightly lower.
Moving to holdings, VYM has 615 stocks with total assets worth $77.17 billion. Its top 3 holdings are Broadcom (AVGO), JPMorgan Chase (JPM), and Exxon Mobil (XOM).
Vanguard Dividend Appreciation ETF (VIG)
The Vanguard Dividend Appreciation ETF (VIG) invests in U.S. companies with a strong history of consistently increasing their dividends. To qualify, a company must have raised its dividend for at least 10 straight years and cannot be among the top 25% highest-yielding eligible stocks. This helps investors avoid yield traps, or companies with unusually high payouts that may not be sustainable. VIG currently pays a quarterly dividend of $0.883 per share, giving it a 1.5% yield.
Because of this disciplined strategy, VIG appeals to investors seeking a more conservative dividend approach that combines steady income with long-term growth. The fund tracks the S&P U.S. Dividend Growers Index.
In terms of holdings, VIG holds 337 stocks and manages about $105.66 billion in assets. VIG’s top holdings include AVGO, Apple (AAPL), and Microsoft (MSFT).