Which Vanguard Dividend ETF is a Better Buy: VYM or VIG?

• Both VIG and VYM ETFs connection ultra-low costs and heavy liquidity.

• VIG has a higher weighting successful exertion and a little dividend output than VYM.

• VIG holds less stocks, focusing connected dividend growth.

• These 10 stocks could mint the adjacent question of millionaires ›

The Vanguard High Dividend Yield ETF (NYSEMKT:VYM) and the Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) some way baskets of U.S. dividend payers, but VYM emphasizes precocious existent output portion VIG focuses connected companies with a way grounds of increasing their dividends, starring to differences successful assemblage exposure, dividend payout, and hazard profile.

Both VYM and VIG entreaty to investors seeking reliable income from large-cap U.S. stocks, but they instrumentality chiseled approaches: VYM targets companies with above-average yields, portion VIG selects firms with accordant dividend growth. This examination unpacks however these differences play retired successful cost, performance, assemblage tilts, and hazard to assistance you determine which ETF to buy.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

VIG is somewhat much affordable, but VYM offers a higher payout, making it much charismatic for those who prioritize income implicit outgo savings alone.

VIG is simply a dividend maturation ETF, holding 338 stocks with a beardown tilt toward exertion (27.8%), followed by fiscal services (21.4%) and healthcare (16.7%). Its largest positions are Broadcom (NASDAQ:AVGO) astatine 7.63%, Microsoft (NASDAQ:MSFT) astatine 4.43%, and Apple (NASDAQ:AAPL) astatine 4.22%. The money has a astir 20-year past and limits attraction hazard by capping holdings arsenic required by its rules-based index.

VYM, by contrast, spreads its bets crossed 566 holdings, with the highest vulnerability to fiscal services (21%) and exertion (14.3%) sectors. Industrials and healthcare person astir adjacent exposure, astatine astir 13% each. Its apical stocks are Broadcom astatine 8.69%, JPMorgan Chase (NYSE:JPM) astatine 4.06%, and ExxonMobil (NYSE:XOM) and Johnson & Johnson (NYSE:JNJ)at 2.3% each.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.

The Vanguard High Dividend Yield ETF and the Vanguard Dividend Appreciation ETF and among the champion dividend ETFs for income investors. The intent and extremity of the ETFs, however, are different, and that should signifier the ground of your buying decision.