These ETFs make it easy to collect lasting passive income.There are many ways to generate passive income. Investing in exchange-traded funds (ETFs) might take the least effort. Buying high-quality ETFs from a leading fund manager like Vanguard allows you to sit back and collect passive income for the rest of your life.Here are three excellent Vanguard ETFs to buy and hold for a lifetime of passive income. Vanguard High Dividend Yield ETFThe Vanguard High Dividend Yield ETF (VYM 0.78%) tracks a diversified i ...

Core Insights - The article emphasizes that not all investments require a trade-off between income and growth, highlighting the potential of exchange-traded funds (ETFs) as a low-maintenance, income-generating investment option [1] Dividend ETFs Overview - Not all dividend ETFs are created equal, with some offering better long-term investment potential than others [2] - The Schwab U.S. Dividend Equity ETF (SCHD) currently has a trailing yield of 3.9%, outperforming the Vanguard High Dividend Yield ETF (VYM) which has a yield of 2.5% [3] Performance Analysis - The Schwab U.S. Dividend Equity ETF has underperformed the S&P 500 and other major dividend funds since 2023, primarily due to its lack of exposure to technology stocks benefiting from the AI trend [4] - Despite its above-average dividend yield, the ETF's overall performance has been subpar, raising concerns about its future relative strength [5] Recommended ETF - The iShares Core Dividend Growth ETF (DGRO) is presented as the ideal buy-and-hold dividend ETF for income-focused investors [6] - DGRO has less than $35 billion in assets, significantly smaller than the Vanguard Dividend Appreciation ETF (VIG) and Schwab's U.S. Dividend Equity ETF [7] Fund Characteristics - DGRO tracks the Morningstar US Dividend Growth Index, which includes companies with a minimum of five consecutive years of annual payout increases and excludes the highest-yielding 10% of stocks [9] - The ETF's holdings are weighted based on the value of their dividend payments, with major positions including Johnson & Johnson, Apple, JPMorgan Chase, Microsoft, and ExxonMobil [10] Performance Metrics - DGRO's quarterly per-share payment has nearly tripled over the past decade, showcasing its ability to provide both reliable dividend income and capital appreciation [12] Investment Strategy - While owning multiple income-focused ETFs can be beneficial, DGRO offers a balanced approach that does not require sacrificing growth for reliable income [14] - The only drawback of DGRO is its lower starting dividend yield, which may be acceptable for long-term investors seeking growth [15]

Core Insights - The article emphasizes the attractiveness of exchange-traded funds (ETFs) for long-term investors seeking quality investments that generate recurring income through dividends [1] Group 1: Vanguard Dividend Appreciation ETF - The Vanguard Dividend Appreciation ETF offers a dividend yield of 1.6%, slightly above the S&P 500 average of 1.2%, with a focus on dividend growth, making it appealing for long-term investors [3] - The fund has a low expense ratio of 0.05%, which is significant for long-term investing as lower fees can lead to higher returns over time [4] - The ETF holds over 330 quality dividend stocks, with Broadcom, Microsoft, and JPMorgan Chase as the top three holdings, where Broadcom constitutes about 6% of the portfolio, providing good diversification [5] - In 2025, the fund has generated total returns of 11%, which is close to the S&P 500's 14%, indicating potential resilience in down years due to its dividend growth [6] Group 2: Vanguard High Dividend Yield ETF - The Vanguard High Dividend Yield ETF offers a higher yield of around 2.5%, more than double the S&P 500 average, focusing on high-yielding stocks with 579 holdings as of August 31 [7] - The fund has a low expense ratio of 0.06%, making it a cost-effective option for investors [7] - There is some overlap with the Dividend Appreciation ETF, as Broadcom and JPMorgan Chase are also top holdings, while ExxonMobil, with a 3.5% yield, is among the top three in this fund [8] - Despite the higher risk associated with high-yielding stocks, the ETF's diversification mitigates this risk, as no single stock, apart from Broadcom and JPMorgan Chase, accounts for more than 3% of the portfolio [9] - This year, the ETF's returns have been consistent with the Dividend Appreciation ETF, both achieving over 11% returns including payouts, making them strong long-term investment options [10]

End result? The Vanguard fund's top three holdings right now are Broadcom , Microsoft , and JPMorgan Chase , while the iShares ETF's biggest three positions at this time are Apple , Microsoft, and Johnson & Johnson . They're more different than alike, even if there is some overlap.Take a comparison of the S&P U.S. Dividend Growers Index behind Vanguard's Dividend Appreciation fund to the iShares Core Dividend Growth ETF's Morningstar US Dividend Growth Index as an example. The former consists of U.S.-listed ...

Bonds play an important role in portfolios. They spin off reliable income and provide ballast when stocks sink. But bonds are not without risk.Some can be whipsawed by interest rate volatility or credit conditions. While 2022 was an anomaly, it showed that bonds are not risk-f free and don't always provide the balance they're supposed to. That year, interest rates shot up and clobbered most intermediate and long-term bond strategies.The broad-based iShares Core US Aggregate Bond ETF, ticker EG, lost 13% tha ...

This fund is ideally suited for long-term investment.Vanguard has made it easy for anyone to passively invest for the long term. The investment manager offers a broad range of low-cost funds.The Vanguard High Dividend Yield ETF (VYM -0.16%) is one of its many excellent long-term holdings. This fund stands out due to its focus on higher-yielding dividend stocks. These companies offer investors income and typically deliver solid total returns with less volatility than the broader market. This combination make ...

Core Viewpoint - The Federal Reserve's recent interest rate cut is expected to benefit dividend-paying stocks, making certain ETFs attractive investment options in a low-rate environment [2][3]. Group 1: Federal Reserve Actions - The Federal Reserve cut its benchmark short-term interest rate by 25 basis points due to slowing economic growth, particularly in the job market [2]. - The current economic forecast suggests one to two more rate cuts may occur in 2025 [2]. Group 2: Investment Opportunities - The market reacted positively to the Fed's rate cut, with specific ETFs focused on dividend-paying stocks likely to perform well as fixed-income investments yield lower returns [3]. Group 3: Schwab U.S. Dividend Equity ETF - The Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index and has a low expense ratio of 0.06% [5]. - As of June 30, the ETF's portfolio had the highest sector weight in energy (19.2%) and consumer staples (18.8%), with significant holdings in healthcare (15.5%) and industrial (12.5%) [6]. - The ETF offers a yield of 3.8%, compared to the S&P 500's 1.2% [7]. Group 4: Utilities Select SPDR Fund - The Utilities Select SPDR Fund (XLU) tracks the Utilities Sector Index, comprising 31 utility companies from the S&P 500 [9]. - The fund has defensive characteristics due to the essential nature of utility services and may benefit from growth in electricity demand for data centers [10]. - The fund has a yield of 2.8% and a low expense ratio of 0.08% [11]. Group 5: Vanguard High Dividend Yield ETF - The Vanguard High Dividend Yield ETF (VYM) aims to track the FTSE High Dividend Yield Index and has a low expense ratio of 0.06% [12]. - The ETF holds 579 stocks, with over 59% in financial, industrial, technology, healthcare, and consumer discretionary sectors, and the financial sector alone accounts for 21.7% [12]. - The largest holdings include Broadcom (6.7%) and JPMorgan Chase (4.1%), with a yield of 2.5% [13].

Core Insights - The article emphasizes the potential of high-yield ETFs for generating passive income, especially in a market where stock prices are at all-time highs [1][2]. Group 1: Vanguard High Dividend Yield ETF - The Vanguard High Dividend Yield ETF (VYM) focuses on value and income-oriented sectors such as financials, consumer staples, utilities, and energy, while also including growth stocks like Broadcom [4]. - Broadcom is highlighted as a top holding due to its strong commitment to dividends, having increased its payout for 15 consecutive years [5]. - The ETF prioritizes dividend quality over yield, featuring companies like Walmart, which has a long history of raising its payouts [6]. - With a 0.06% expense ratio and a yield of 2.5%, VYM offers a better passive income option compared to the S&P 500's 1.2% yield [7]. Group 2: Vanguard Energy ETF - The Vanguard Energy ETF (VDE) mirrors the energy sector's performance and invests in over 100 energy stocks, achieving a yield of 3.1% [9][10]. - A significant portion of the fund (39%) is invested in ExxonMobil and Chevron, both of which have a long history of increasing dividends [10]. - The fund has a low expense ratio of 0.09% [11]. Group 3: Schwab U.S. Dividend Equity ETF - The Schwab U.S. Dividend Equity ETF (SCHD) is more yield-focused, with over half of its holdings in energy, consumer staples, and healthcare sectors, offering a yield of 3.7% [12]. - It features a low expense ratio of 0.06% [13]. Group 4: JPMorgan Equity Premium ETFs - The JPMorgan Equity Premium ETFs (JEPI and JEPQ) utilize covered calls and equity-linked notes to generate income, with yields of 8.4% and 11.1% respectively [14][16]. - These ETFs are designed for investors seeking passive income that exceeds bond returns, albeit with capped upside potential [15][17]. - Both funds have higher expense ratios of 0.35% due to active management, and they provide monthly distributions [17].

Group 1 - The article emphasizes that investing can be simplified through the use of exchange-traded funds (ETFs), which offer various focuses such as industries, company sizes, geographic regions, and investment types [1] - It suggests that for investors with $500 to invest, two Vanguard ETFs are recommended as complementary options for a stock portfolio [2] Group 2 - The Vanguard High Dividend Yield ETF (VYM) is highlighted as a strong option for generating income through dividends, which can provide stability during market downturns [4][8] - VYM currently offers a yield of just over 2.5%, which is more than double the S&P 500 average, and it holds 580 large-cap stocks across major sectors, with financials being the largest sector at 21.6% [5][6] - The article notes the importance of reinvesting dividends to acquire more shares, which can enhance long-term investment growth, despite a $500 investment yielding only $12.50 annually if not reinvested [7]

Core Insights - The Schwab U.S. Dividend Equity ETF has shown significant growth, with a 45% increase over the past five years and over 130% in the last ten years, driven by the quality of its holdings and stock buyback programs [1][3][6] - The ETF is based on the Dow Jones U.S. Dividend 100 Index, which emphasizes reliable dividend payments, cash flow, and return on equity, distinguishing it from traditional cap-weighted funds [2][4] - The Vanguard Dividend Appreciation ETF has approximately $100 billion in assets and focuses on reliable dividend growers, with notable holdings including Broadcom, Microsoft, and JPMorgan, and has seen its quarterly payments nearly double over the past decade [7][8] - The Vanguard Dividend Appreciation ETF has produced a 186% price increase over the last ten years, benefiting from the rise of technology stocks [9] - The Vanguard High Dividend Yield ETF currently has a modest yield of 2.5%, which is below expectations, and has been affected by the performance of its largest holdings [13][15][17] ETF Performance and Characteristics - The Schwab U.S. Dividend Equity ETF offers a trailing yield of just under 3.8%, appealing to income-focused investors, although higher yields can be found elsewhere [3][6] - The Vanguard Dividend Appreciation ETF's yield is relatively low at just over 1.6%, primarily due to its selection criteria that exclude high-yield stocks [10][11][12] - The Vanguard High Dividend Yield ETF's yield has decreased significantly since late 2023, as its largest holdings have outperformed in the broader market [15][16][17] Investment Considerations - Dividend stocks and ETFs provide a simpler solution for investors seeking reliable income that grows over time, with ETFs being less hassle than individual stock purchases [5] - The Schwab U.S. Dividend Equity ETF is recommended for income investors seeking relative safety, despite trailing the S&P 500 in performance when dividends are not reinvested [6] - The Vanguard High Dividend Yield ETF may not be a suitable investment currently due to its underwhelming yield and market conditions affecting its performance [13][17]