Which Vanguard Dividend ETF is a Better Buy: VYM or VIG?

Core Insights - The Vanguard High Dividend Yield ETF (VYM) focuses on high current yield, while the Vanguard Dividend Appreciation ETF (VIG) emphasizes companies with a history of growing dividends, leading to differences in sector exposure, dividend payout, and risk profile [1][2] Cost & Size Comparison - VYM has an expense ratio of 0.06% and assets under management (AUM) of $84.5 billion, while VIG has a slightly lower expense ratio of 0.05% and a larger AUM of $120.4 billion [3] - The 1-year total return for VYM is 19.8%, compared to VIG's 18.6%, and VYM offers a higher dividend yield of 2.4% versus VIG's 1.6% [3][4] Performance & Risk Comparison - Over the past five years, VYM experienced a maximum drawdown of 15.9%, while VIG had a higher drawdown of 20.4% [5] - The growth of $1,000 over five years is $1,566 for VYM and $1,573 for VIG, indicating similar performance [5] Portfolio Composition - VIG holds 338 stocks with significant exposure to technology (27.8%), financial services (21.4%), and healthcare (16.7%), with top positions in Broadcom, Microsoft, and Apple [6] - VYM has a broader portfolio with 566 holdings, primarily focused on financial services (21%) and technology (14.3%), with top stocks including Broadcom, JPMorgan Chase, and ExxonMobil [7] Investment Strategy - VYM targets high-yield companies and tracks the FTSE High Dividend Yield Index, which reflects the performance of companies with high dividend yields across all market capitalizations [9] - VIG tracks the S&P U.S. Dividend Growers Index, focusing on companies that have increased their dividend payouts for at least 10 years, thus favoring stable and expanding firms [10][12]