Want to Generate Thousands of Dollars in Passive Income? This ETF Could Be Your Ticket
The Vanguard High Dividend Yield ETF is a reliable income play.
Vanguard High Dividend Yield ETF, symbolized as VYM, has become a favored investment vehicle for those seeking passive income. This ETF mirrors the FTSE High Dividend Yield Index, encompassing more than 600 U.S. companies that issue dividends with higher-than-average yields. It boasts a minimal expense ratio of 0.04%, making it an appealing option for investors.
As of the end of July, its 30-day SEC yield stood at 2.22%. The index behind VYM ranks dividend-paying U.S. firms based on their projected yield for the upcoming year, selecting the top half and weighting them according to their market capitalization. Notably, VYM deliberately omits real estate investment trusts (REITs), which typically offer high yields but do not enjoy favorable tax treatment.
This selection process leads VYM to concentrate on stable, mature sectors such as financials, industrial, healthcare, consumer staples, and energy. Consequently, it exhibits less exposure to the tech sector compared to broader market indexes.
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