Vanguard High Dividend Yield ETF (VYM 0.41%) 2026 has very quietly been a strong performer. Its double-digit weightings in the energy, technology and industrials sectors have helped boost performance and made it an above-average performer in the US dividend exchange-traded fund (ETF) category.
But in April there was a rapid change in the technical sector growth stock. As has happened in the past, technological leadership leaves almost every other sector behind. This has cooled off the momentum on this fund recently, but I still see a bullish argument for the rest of 2026.
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VYM ownership case
The Vanguard High Dividend Yield ETF is trading up more than 8% year to date, compared to just over 4% last year. S&P 500. It leans toward higher earnings and value, which worked in early 2026, but not in April. The 20% gain for the tech sector in April indicates an exaggerated rally. This could swing things back in favor of VYM’s more cyclical performance.
One of the factors that prompted investors to turn to dividend stocks in early 2026 was concerns about valuations and overspending in the tech sector’s AI development. In April, some of those fears were quelled as companies reported solid revenue and earnings growth as they redoubled AI investments. This swung the pendulum back in favor of tech, which performed historically well last month.
Vanguard High Dividend Yield ETF
today’s change
(-0.41%) $-0.64
current price
$156.55
key data points
day limit
$156.55 -$157.43
52wk range
$124.06 -$157.48
volume
19K
But the long term case is still in favor Vanguard High Dividend Yield ETF. Investors turned more defensive this year amid concerns about high inflation, slow growth, a stagnant labor market and the war in Iran. Those factors generally increase the risk of a recession sharply. These issues have not gone away yet, but they have been prevalent for the last one month.
The diversified nature of this fund’s high-yield portfolio introduces some downside risk if the economy turns sour. But the relatively low risk in traditionally defensive sectors of the market, such as consumer staples, provides investors with an opportunity to participate in risk-based market profits. The large allocation to the financial sector has not helped performance, but the fund’s low risk profile could do well if economic measures deteriorate later this year.
VYM: Performance and Key Metrics
| metric | Vanguard High Dividend Yield ETF |
|---|---|
| year-to-date returns | 8.3% |
| 1 year total return | 27.5% |
| 3 year annual return | 16.3% |
| 5 year annual return | 11.4% |
| dividend yield | 2.4% |
| expense ratio | 0.04% |
| assets under management | $72.6 billion |
| number of holdings | 612 |
| top area | Financial (20%), Industrial (14%), Healthcare (13%) |
Data Source: Vanguard.
From a high-level perspective, corporate earnings look strong for the S&P 500 in 2026. It should be a rising tide that lifts all boats, even if the Vanguard High Dividend Yield ETF doesn’t beat the S&P 500 in the process. Given current economic trends, I like the fund’s value bias and believe it could serve investors well if these trends continue.
David Dierking No positions in any of the stocks mentioned. The Motley Fool has a position in and recommends the Vanguard High Dividend Yield ETF. The Motley Fool has one Disclosure Policy.
