VYM: Better Positioned But Still Likely To Underperform The Broader Indexes

seekingalpha03-28

Market conditions remain fluid with high price levels and a fluctuating environment.Dividend investing has become popular, but Vanguard High Dividend Yield Index Fund underperforms broader indexes and...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nVYM: Better Positioned But Still Likely To Underperform The Broader Indexes\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-28 20:49 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4680947-vym-better-positioned-likely-to-underperform-broader-indexes><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Market conditions remain fluid with high price levels and a fluctuating environment.Dividend investing has become popular, but Vanguard High Dividend Yield Index Fund underperforms broader indexes and...</p>\n\n<a href=\"https://seekingalpha.com/article/4680947-vym-better-positioned-likely-to-underperform-broader-indexes\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SPXU","symbol_name":"三倍做空标普500ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4680947-vym-better-positioned-likely-to-underperform-broader-indexes","article_id":"2422195337","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1472468191/image_1472468191.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2422195337","pubTimestamp":1711630151,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Market conditions remain fluid with high price levels and a fluctuating environment.Dividend investing has become popular, but Vanguard High Dividend Yield Index Fund underperforms broader indexes and","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SPXU":"三倍做空标普500ETF","BK4585":"ETF&股票定投概念",".SPX":"S&P 500 Index","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0234572021.USD":"高盛美国核心股票组合Acc","SG9999002232.USD":"Allianz Global High Payout USD","BK4566":"资本集团","BK4007":"制药","SG9999002224.SGD":"Allianz Global High Payout SGD","UPRO":"三倍做多标普500ETF","SPY":"标普500ETF","SPY.AU":"SPDR® S&P 500® ETF Trust","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","SG9999002521.SGD":"United Global Resources A Acc SGD","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","BK4568":"美国抗疫概念","FDN":"First Trust Dow Jones Internet I","LU1032466523.USD":"高盛全球多资产收益组合Acc","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","BK4207":"综合性银行","LU1548497426.USD":"安联环球人工智能AT Acc","OEF":"标普100指数ETF-iShares","LU0971096721.USD":"富达环球金融服务 A","LU1267930490.SGD":"TEMPLETON GLOBAL EQUITY INCOME \"AS\" (SGD) INC A","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU0882574139.USD":"富达环球消费行业基金A ACC","BK4512":"苹果概念","VYM":"红利股ETF-Vanguard","LU1244550494.USD":"FRANKLIN GLOBAL MULTI-ASSET INCOME \"A\" (USDHEDGED) ACC","IVV":"标普500指数ETF","SSO":"两倍做多标普500ETF","LU0238689110.USD":"贝莱德环球动力股票基金","LU0234570918.USD":"高盛全球核心股票组合Acc Close","DHS":"WisdomTree U.S. High Dividend Fund","SCHD":"Schwab US Dividend Equity ETF","OEX":"标普100","BK4201":"综合性石油与天然气企业","JNJ":"强生","XOM":"埃克森美孚","BK4516":"特朗普概念","SH":"标普500反向ETF","SDS":"两倍做空标普500ETF","BK4515":"5G概念","AVGO":"博通","LU0056508442.USD":"贝莱德世界科技基金A2","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC"},"translate_title":"VYM：定位更好，但仍可能表现不佳于更广泛的指数","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AVGO":1,"XOM":1,"VYM":1,"SPY.AU":1,"SPY":1,"SCHD":1,"JNJ":1,"DHS":1,"FDN":0.9,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,".SPX":0.6,"ESmain":0.6,"IVV":0.6},"content_text":"Market conditions remain fluid with high price levels and a fluctuating environment.Dividend investing has become popular, but Vanguard High Dividend Yield Index Fund underperforms broader indexes and offers minimal income.The fund's significant holdings in technology and cyclical sectors contribute to its underperformance and lower income compared to peers.gopixa Market conditions continue to be fluid, with overall inflation rates coming down, but price levels generally remain high throughout the economy. While most investors' long-term objectives are by definition not going to change anytime soon, individual strategies still have to evolve as the market environment fluctuates. Dividend investing has become more common in the last ten years since rates have been at historically low levels for extended periods of time since 2008, and many investors have focused on funds that focus on income and have large and diverse holdings. One well-known exchange-traded fund that focuses on dividends is the Vanguard High Dividend Yield Index Fund (NYSEARCA:VYM). Data by YCharts VYM is up a decent 300 percent since the fund's inception in late 2006. Still, the S&P 500 (SPY) has risen 427.88% during this same time period. VYM has offered only minimal income since 2006 as well, so comparing the ETF to the broader index is important. I last wrote about the Vanguard High Dividend Yield Index Fund in May of 2023. I rated the fund a strong sell primarily because of how I believed a recession would impact the fund's significant cyclical holdings. I am upgrading the fund from strong sell to hold today. The prospect of a significant economic retraction has diminished and the fund is also better positioned today since the rate of inflation has fallen. Still, this fund remains unlikely to outperform the broader indexes or offer the same income as other dividend-focused ETFs for multiple reasons. This Vanguard fund has $64.82 billion in funds under management and a yield of 2.88%. The ETF pays quarterly dividends. VYM's holdings are 21.95% financials, 13.41% consumer defensives, 12.58% health care, 12.24% industrials, 6.92% consumer cyclical, 6.17% utilities, 11.15% technology, 9.85% energy, 2.20% basic materials, and .01% real estate. The ETF's largest holdings are Broadcom Inc. (AVGO), JPMorgan Chase & Co. (JPM), Exxon Mobil (XOM), and Johnson & Johnson (JNJ). A List of VYM's Holdings (Seeking Alpha) VYM is primarily a growth fund, not an income-based investment. The fund has only raised dividend payouts at a rate of 5.22% per year over the last 5 years, and 6.92% per year over the last 10 years. The current yield is also just 2.88%. The main reason VYM has offered investors only minimal income since the fund's inception is because this ETF has consistently been overweight the technology and industrial sectors, both industries that usually payout below-average dividends and income. Still, this fund's significant holdings in less cyclical sectors such as health care and the consumer defensive sector are the primary reason this ETF has also consistently and significantly underperformed the broader indexes. Recent price data show the rate of inflation has fallen to nearly 3% and the economy appears likely to avoid a recession since consumer spending levels remain stable. VYM has never had significant energy and basic material holdings, so the fund predictably underperformed during the recent inflationary period that began in early 2021. This Vanguard fund performs best in a market environment with minimal inflation and solid growth because of the fund's significant holdings in big-cap tech and in more cyclical industries such as the industrials. Still, while the overall economic conditions are more favorable for VYM now, this fund is still likely to underperform the broader indexes and offer less income than some of the fund's peers for multiple reasons. This ETF's significant defensive holdings make the fund likely to offer less growth than the broader indexes, but the Vanguard's funds significant holdings in the industrial and technology sectors also make this fund likely to offer less income than peers such as the Schwab U.S. Dividend Equity ETF Fund (SCHD) and the WisdomTree U.S. High Dividend Fund ETF (DHS). Both of these funds have only minimal allocations to the technology sector, which historically has paid less income, and these two ETFs also focus more than VYM on industries that tend to pay higher dividends such as the Utility and Energy sectors. VYM's defensive holdings in sectors such as the health care and consumer defensive sector make this fund likely to continue to underperform the broader indexes as well.  VYM does have the potential to offer investors solid growth because of the fund's overweight position in the technology sector and more cyclical parts of the market. The current economic environment is also more favorable for this fund, since the rate of inflation has come down, and growth rates remain stable. Still, most individuals who are interested primarily in growth or income should be able to find better alternative investments that focus more narrowly on specific objectives.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2422195337"}