The Vanguard High Dividend Yield ETF is one of America’s most widely held income funds, built for investors who want broad exposure to dividend-paying stocks without putting all their eggs in one basket. It tracks the FTSE High Dividend Yield Index, holding around 550 of the largest US companies that pay above-average dividends — names like JPMorgan Chase, ExxonMobil, and Johnson & Johnson sit comfortably in the mix. Where the Schwab U.S. Dividend Equity ETF (NYSE Arca: SCHD) runs a tight quality screen with around 100 holdings, VYM casts a much wider net, making it one of the most diversified dividend funds available anywhere in the world.
The current yield only sits at roughly 2.8–3.0% (unfranked)y, slightly lower than SCHD, but the sheer breadth of holdings means you’re far less exposed to any single company or sector having a bad year. The annual fee is also 0.06%. For Australian investors, VYM is a compelling option if steady, reliable dividend income across a wide slice of corporate America is the goal, while at the same time providing exposure to the US market. Similar to the SCHD returns, which are priced in US dollars, hence AUD/USD movements will impact returns.
This ETF has returned 8.5% year to date, again beating the S&P 500’s ~4.2% total return. The ETF offers investors a very diversified entry into the US market with the bonus of the strong purchasing power of the $A.
- We are initially targeting new highs around $US160, but if US stocks remain firm through 2026, it could trade much higher.
