The Vanguard Group inc. - a certified American Investment Advisor offers VYM vs VIG, two extremely popular Exchange Traded Funds (ETFs). The business is the world's largest provider of mutual funds and the second-largest provider of ETFs. The company also offers numerous additional services, including brokerage, financial planning, asset management, trust services, fixed- and variable- annuities, etc. Vanguard Group Inc. is a corporation that dominates America, with BlackRock and State Street as one of the Big Three Index Fund Managers. See the comprehensive VYM vs VIG comparison and VIG vs VYM etf.
What Are VYM And VIG, What Are They?
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VYM vs VIG represents Vanguard High Dividend Yield ETF with more dividend yield stocks than average, excluding real property investment trusts (REITs).
VIG stands for Vanguard Dividend Appreciation ETF and comprises dividend growth holdings of firms that, excluding Real Estate Investments Trusts, have witnessed an increasing dividend for a minimum of ten consecutive years (REITs). VIG is trying to surpass the Nasdaq US Select Index Dividend Achievers. Both VIG and VYM are prominent dividend-focused index funds holding securities offered by the Vanguard Group INC with appreciating pay-outs. The investors who desire to profit from their investments via dividend pay-out without selling their equity often use these offers.
VYM Against VIG
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Although both VYM or VIG have the same low-cost ratio and focus on high dividend-paying stocks, they do not. Investors can choose one of these two ETFs based on their investment goals and the time horizon. Although the dividend investors often mix them and use them indistinguishably, there are significant differences between them.
The following table compares the basic information of the two funds. In the table above, it is clear that in both funds, such as Exchange Traded Funds (ETFs), categorised as high ETF value, the minimum investment required is identical to the single-share price and the management costs are 0.06%. The only difference between the two is the number of stocks and the dividend returns, primarily because of their financial aim.
Since VYM is paying its investors "now" a high dividend rather than in the future, it has a greater dividend yield. At the same time, VIG rewards investment dividends by holding stocks with appreciated tips over at least ten years. Consequently, VIG follows a considerably tougher strategy, with fewer equities held and stocks removed that could be dangerous in lowering the dividend payments.
Value And Stock Performance Differences
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Based on recent statistics, VIG shows significantly superior performance with a 12% increase, and that VYM is not far behind at a 9% gain. In the light of the values, it is also quite interesting to observe that VYM (High Dividend Yield) ETF holdings are cheaper than the VIG holdings (Dividend Appreciation). Recent numbers illustrate that VYM has a lower risk potential within its portfolio - high-dividend yield has 18, while dividend appreciation has 23.
Dividend Income: VYM Against VIG
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VYM lives true to its name by providing its shareholders with more enormous dividends than VIG.
The VIG ETF should generate more significant payments for dividends. However, this is not the case. Compared with VIG, which has seen a 21 per cent increase in earnings over the same period, the total yearly dividends from VYM VS VIG climbed by more than 25 per cent over 2014 and 2017. This is consistent with the longer-term trends, and hence this criterion is won by the High Dividend Yield (VYM).
Conclusion
Consequently, for individuals with a long investing perspective, VIG is a solid long-term investment opportunity. The top ten holdings have increased their dividends significantly in the last few years.
The pattern will continue, rewarding patients who are patient enough to endure uncertain economic times with their investments. The portfolio of VIG's stock comprises high-quality stocks that can enhance their dividends in the future.
