Better Dividend ETF: Vanguard's VYM vs. iShares' HDV

Core Viewpoint - The comparison between iShares Core High Dividend ETF (HDV) and Vanguard High Dividend Yield ETF (VYM) highlights their differing approaches to dividend investing, with HDV focusing on defensive sectors and higher yields, while VYM offers broader diversification and lower costs [5][6]. Group 1: Fund Characteristics - HDV consists of 74 stocks with a sector focus on consumer defensive (28%), energy (24%), and healthcare (17%), featuring major positions in Exxon Mobil Corp., Johnson & Johnson, and Chevron Corp. [1] - VYM tracks a high-dividend index with 589 holdings, emphasizing financial services (21%), technology (18%), and healthcare (13%), with significant investments in Broadcom, JPMorgan Chase, and Exxon Mobil Corp. [2] - HDV has a higher dividend yield compared to VYM, but its higher expense ratio may reduce net income for investors [3][7]. Group 2: Performance and Risk - HDV is characterized by lower volatility and a lower maximum drawdown, making it suitable for risk-averse investors [7]. - VYM's larger number of holdings provides greater diversification, which can mitigate risks associated with downturns in specific sectors [8]. - VYM has a larger asset under management (AUM) of $84.5 billion, enhancing its liquidity compared to HDV [8]. Group 3: Investor Preferences - VYM is recommended for investors prioritizing diversification, lower costs, and stronger total returns over high dividend yields [9]. - HDV is more appealing to those who prioritize receiving the highest dividend yield with reduced volatility [9].