Key Points
Vanguard High Dividend Yield ETF offers a lower expense ratio but has a lower trailing-12-month dividend yield than iShares Core High Dividend ETF.
iShares Core High Dividend ETF maintains a more concentrated portfolio of 74 holdings, while Vanguard High Dividend Yield ETF holds more than 600 securities.
Vanguard High Dividend Yield ETF has achieved a higher total return over the last year and shows higher price volatility relative to the broader market.
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Both the Vanguard High Dividend Yield ETF (NYSEMKT:VYM) and the iShares Core High Dividend ETF (NYSEMKT:HDV) target U.S. companies that distribute significant cash to shareholders, but they follow different construction strategies. Investors typically choose between the Vanguard fund for its broad diversification across nearly 600 companies and the iShares fund for its more selective, high-conviction approach to income within a smaller basket of stocks.
Snapshot (cost & size)
| Metric | HDV | VYM |
|---|---|---|
| Issuer | iShares | Vanguard |
| Expense ratio | 0.08% | 0.04% |
| 1-yr return (as of 5/18/26) | 22.9% | 23.6% |
| Dividend yield | 2.9% | 2.3% |
| Beta | 0.37 | 0.73 |
| AUM | $13.6 billion | $77.5 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is more affordable with an expense ratio of 0.04%, which is half the cost of the iShares fund. However, iShares provides a higher payout, with a trailing-12-month dividend yield of 2.9% compared to 2.3% for Vanguard.
Performance & risk comparison
| Metric | HDV | VYM |
|---|---|---|
| Max drawdown (5 yr) | (15.4%) | (15.9%) |
| Growth of $1,000 over 5 years (total return) | $1,617 | $1,704 |
What's inside
The Vanguard High Dividend Yield ETF holds about 600 securities and leans toward financial services (20.2%), technology (14.8%), and industrials (14.2%). Its largest positions include Broadcom at 8%, JPMorgan Chase at 3.33%, and ExxonMobil at 2.7%. This fund was launched in 2006 and paid $3.51 per share over the trailing 12 months. It provides a convenient way to track stocks forecast to have above-average dividend yields.
In contrast, the iShares Core High Dividend ETF maintains a more concentrated portfolio of 74 holdings, prioritizing the consumer defensive (25%), energy (22%), and healthcare (17%) sectors. Its top holdings include ExxonMobil at 8.5%, Chevron at 6.3%, and Johnson & Johnson at 5.7%. Launched in 2011, this fund has a trailing-12-month dividend of $0.79 per share. While the Vanguard fund offers broader exposure, the iShares fund focuses on relatively high dividend-paying U.S. equities.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
Investing in dividend-paying stocks is a great way to diversify your portfolio while also collecting income, which you can reinvest for compound growth, invest in other stocks, or cash out to pay your bills. And investing in dividend-focused ETFs allows you to capture those gains without the extra steps of selecting and monitoring individual stocks.
The Vanguard High Dividend Yield ETF and the iShares Core High Dividend ETF offer similar total returns over the last one- and five-year periods, as well as similar maximum drawdowns. So the choice between the two likely comes down to fees and portfolio allocation strategy. VYM tracks the performance of the FTSE High Dividend Yield Index, which tracks stocks with the highest dividend yields (excluding real estate investment trusts, or REITs). It provides broader market coverage and lower fees than HDV. HDV offers a higher yield through a more concentrated, defensive portfolio and tracks the narrower Morningstar Dividend Yield Focus Index. That concentration gives it a slightly higher yield, but also means one holding could limit its performance more significantly than any one stock in VYM.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Johnson & Johnson and Vanguard High Dividend Yield ETF. The Motley Fool has positions in and recommends Broadcom, Chevron, JPMorgan Chase, and Vanguard High Dividend Yield ETF. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
