5-Star ETFs Poised to Pop: Vanguard High Dividend Yield

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Vanguard High Dividend Yield ETF (NYS: VYM) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at the Vanguard High Dividend Yield and see what CAPS investors are saying about the ETF right now.

Vanguard High Dividend Yield facts


November 2006

Total Assets

$1.82 billion

Investment Approach

Passively managed ETF that seeks to track the performance of the FTSE High Dividend Yield Index

Expense Ratio


Dividend Yield


1-Year / 3-Year Annualized Returns

8.8% / 8.5%

Top Holdings with High CAPS Rating (4 or 5 Stars) and Portfolio Weight

ExxonMobil (NYS: XOM) (6.9%)

General Electric (NYS: GE) (3.4%)

Johnson & Johnson (NYS: JNJ) (3.1%)


SPDR S&P Dividend (NYS: SDY)

WisdomTree LargeCap Dividend (NYS: DLN)

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 96% of the 69 members who have rated Vanguard High Dividend Yield believe the ETF will outperform the S&P 500 going forward. These bulls include Stan1955 and Manders001.

This past summer, Stan1955 tapped the ETF as a particularly timely income opportunity: "Everyone is rushing to buy dividend stocks which will push VYM holdings higher. Let low cost Vanguard do the work for you, keep it simple Fool."

In fact, Vanguard High Dividend Yield sports an ultra-low expense ratio of 0.18%. That's lower than that of other dividend ETF alternatives SPDR S&P Dividend (0.35 %) and WisdomTree LargeCap Dividend (0.28%).

CAPS member Manders001 expands on the outperform argument:

Index funds are popular. Stocks with dividends are also favorites. This index tracks [more than 400 stocks] that offer dividends. You are instantly diversified when you buy into it and it being a Vanguard fund, the Expense Ratio is low.... This is a buy and hold stock at anywhere below $50.00 per share.

What do you think about Vanguard High Dividend Yield, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track Vanguard High Dividend Yield?Add it to your watchlist.

At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. The Motley Fool owns shares of Johnson & Johnson.Motley Fool newsletter serviceshave recommended buying shares of and creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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