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Vanguard High Dividend Yield ETF (VYM): Low Expense, Broad Blue-Chip Exposure

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  Published in Stocks and Investing on Thursday, December 11th 2025 at 15:30 GMT by 24/7 Wall St.

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High‑Yield Dividend ETFs to Load Up on Right Now – An In‑Depth Summary

The MSN Money article “3 high‑yield dividend ETFs to load up on right now and why” (published December 6, 2023) provides a concise but insightful look at three exchange‑traded funds that are currently attracting attention from income‑seeking investors. The author—an experienced financial writer—uses recent market data and fund‑specific metrics to explain why each ETF is a compelling addition to a diversified portfolio, especially for investors who want a steady cash flow without the tax drag of a high‑growth growth‑style strategy. Below is a comprehensive summary that captures every key point, fact, and recommendation from the article.

1. Vanguard High Dividend Yield ETF (VYM)

Why VYM?
VYM sits at the center of the article because of its blend of high yield, low expense ratio, and a broad exposure to large‑cap U.S. equities. The fund’s 2023 dividend yield is roughly 3.5 %, a figure that sits comfortably above the average yield of the broader S&P 500.

Fund Snapshot
- Expense Ratio: 0.06 % – one of the lowest in its category.
- Top Holdings: Procter & Gamble, Johnson & Johnson, Microsoft, and Coca‑Cola.
- Sector Breakdown: 30 % in Consumer Staples, 20 % in Health Care, 15 % in Information Technology, and 10 % in Utilities.
- Dividend Payout Pattern: Semi‑annual, with a long history of consistent and growing distributions.

Why It’s a Good Buy Now
The article highlights the fund’s diversified exposure and notes that large‑cap, blue‑chip companies tend to be more resilient in volatile markets. In a period of rising inflation and tightening monetary policy, investors looking for a cushion against price swings find VYM’s stable payout attractive.

2. Schwab U.S. Dividend Equity ETF (SCHD)

Why SCHD?
SCHD is praised for its quality‑focused selection methodology. Unlike many high‑yield funds that chase pure payout rates, SCHD emphasizes companies with a dividend growth track record, which the article argues translates into lower volatility and higher long‑term returns.

Fund Snapshot
- Expense Ratio: 0.06 % – competitive and comparable to VYM.
- Top Holdings: Coca‑Cola, McDonald’s, PepsiCo, and Exxon Mobil.
- Sector Breakdown: 20 % Consumer Staples, 15 % Financials, 10 % Industrials, and 5 % Energy.
- Dividend Yield: Approximately 3.2 % as of late‑2023.
- Yield Stability: The fund’s underlying methodology filters out companies that have not paid a dividend for at least five consecutive years, creating a “quality” filter.

Why It’s a Good Buy Now
The author cites SCHD’s strong dividend growth and lower risk profile as reasons to add the ETF to a portfolio focused on income preservation rather than pure yield maximization. The fund’s heavy weighting in the consumer staples and utilities sectors further reduces exposure to cyclical downturns.

3. iShares Core High Dividend ETF (HDV)

Why HDV?
HDV is chosen for its blend of high yield and a more conservative approach to dividend sustainability. The article describes the fund’s investment style as “value‑driven” because it favors companies that have strong balance sheets and healthy cash flow relative to their dividend payments.

Fund Snapshot
- Expense Ratio: 0.08 % – slightly higher but still low.
- Top Holdings: Johnson & Johnson, Procter & Gamble, and Coca‑Cola.
- Sector Breakdown: 35 % Consumer Staples, 20 % Health Care, 15 % Utilities, 10 % Financials.
- Dividend Yield: Roughly 3.4 %.
- Quality Filters: The fund’s methodology includes a “dividend sustainability” ratio, ensuring the payout ratio stays below 70 % of operating cash flow.

Why It’s a Good Buy Now
The article underscores HDV’s robust quality filters that help it navigate periods of high dividend‑yield chasing. HDV’s conservative payout approach is a good match for retirees or income‑seeking investors who prioritize stability over the highest possible yield.

Key Takeaways From the Article

1. Yield vs. Quality – The article stresses that chasing the highest yield can be risky. All three ETFs maintain a balance between attractive payouts and robust company fundamentals, which historically reduces the risk of dividend cuts.

2. Expense Ratios Matter – With expenses ranging from 0.06 % to 0.08 %, these funds keep costs low, ensuring that a larger share of the dividends remains in investors’ pockets.

3. Sector Allocation – Each ETF’s sector weighting is skewed toward defensive sectors (consumer staples, utilities, health care). This composition is expected to perform well in economic downturns, providing a buffer for income investors.

4. Tax Efficiency – The article briefly notes that these ETFs are generally tax‑efficient because they are built on a long‑term strategy, meaning fewer trades and lower capital‑gain distributions.

5. Portfolio Placement – The author recommends using these ETFs in a core allocation of a portfolio, with a mix of growth and income holdings. For example, pairing VYM or SCHD with a growth ETF like QQQ or a bond ETF like BND can create a well‑rounded 60/40 or 70/30 mix.

How to Load Up Right Now

The article offers practical steps for investors who want to add these ETFs to their holdings:

• Use a brokerage that allows commission‑free trades for ETFs, such as Fidelity, Charles Schwab, or Vanguard’s own platform.
• Consider dollar‑cost averaging if the market is volatile; buying in smaller increments over time can lower the average entry price.
• Rebalance annually to maintain the intended allocation, as dividend income can shift the relative weight of these ETFs over time.

Final Verdict

According to the MSN Money article, the combination of high dividend yield, low expense ratios, and quality‑focused screening makes VYM, SCHD, and HDV top picks for investors looking for reliable income in an uncertain market environment. While each fund carries its own nuances—VYM’s broad exposure, SCHD’s dividend‑growth focus, and HDV’s conservative payout ratios—together they provide a diversified high‑yield core that can serve as a solid foundation for any income‑oriented portfolio.

By following the article’s recommendations and the provided links to each ETF’s fact sheet, investors can make an informed decision on which high‑yield dividend ETF best aligns with their risk tolerance, tax situation, and overall investment goals.