Vanguard’s high-dividend ETF delivered a 21.6% total return over the past year, exceeding the 10-year Treasury yield of 4.62%.
Vanguard High Dividend Yield ETF (VYM) reported $94.6 billion in assets, with a 21.6% total return over the past year. The fund’s performance outpaced the 10-year Treasury yield, currently at 4.62%, driven by blue-chip dividend stocks with strong free cash flow coverage.
VYM tracks the FTSE High Dividend Yield Index, holding roughly 550 large-cap U.S. stocks weighted by market cap. The fund rebalances annually, removing dividend-cutters and adding higher-yielding stocks. Top holdings include Broadcom, which accounts for about 8% of assets, and other dividend-paying giants like AT&T and AbbVie.
AT&T’s dividend remains flat for four years with net debt/EBITDA at 2.71x, limiting growth prospects. Meanwhile, AbbVie’s Skyrizi and Rinvoq generate $6.6 billion quarterly, covering its dividend twice over despite Humira’s 38% revenue decline.