Income-Oriented ETFs: VYM Offers Greater Diversification, While HDV Boasts a Higher Yield

Core Insights - Vanguard High Dividend Yield ETF (VYM) offers lower costs and greater diversification compared to iShares Core High Dividend ETF (HDV), which provides a higher dividend yield and focuses more on energy and defensive sectors [1][2] Cost and Size Comparison - VYM has an expense ratio of 0.04%, while HDV has a higher expense ratio of 0.08% - As of March 11, 2026, VYM's one-year return is 17.5%, compared to HDV's 13.8% - VYM has a dividend yield of 2.3%, while HDV offers a higher yield of 2.9% - VYM has an Assets Under Management (AUM) of $73.7 billion, significantly larger than HDV's $13.3 billion [3][4] Performance and Risk Comparison - Over the past five years, VYM experienced a maximum drawdown of -15.83%, while HDV had a slightly lower drawdown of -15.41% - An investment of $1,000 in VYM would have grown to $1,487 over five years, compared to $1,423 for HDV [5] Portfolio Composition - HDV consists of 74 stocks, with major allocations in consumer defensive (28%), energy (26%), and healthcare (17%), featuring top positions in Exxon Mobil Corp, Chevron Corp, and Johnson & Johnson [6] - VYM holds 589 stocks, primarily in financial services, technology, and healthcare, with significant positions in Broadcom Inc, JPMorgan Chase & Co, and Exxon Mobil Corp, indicating a more diversified approach [7] Historical Performance - Both funds have been operational for over 15 years, with VYM founded in 2006 - VYM has achieved a total return of 437%, translating to a compound annual growth rate (CAGR) of 11.9%, while HDV has a total return of 350% and a CAGR of 10.6% - Both funds underperform the S&P 500, which has a CAGR of 13.7% during the same period [9]