Vanguard High Dividend Yield ETF (VYM)
For a more diversified option, retirement investors might consider the Vanguard High Dividend Yield ETF (VYM), which is squarely focused on large-cap names that pay above-average dividends.
VYM is classified as a large value fund, and it holds a number of high-quality stocks — ergo, this isn’t the place to find distressed companies with unsustainable yields. We’re talking about top holdings such as Exxon Mobil (XOM), General Electric (GE), Microsoft (MSFT), Johnson & Johnson (JNJ) and Chevron (CVX).
The 384-stock portfolio leans most heavily toward consumer goods, where it has a 15% stake, while 14% is currently invested in the industrials sector.
VYM’s results over time have been solid, with the ETF returning more than 17% annually during the past five years. That’s helped in part by a nice yield of 2.8% in the TTM (3.1% SEC), as well as a miniscule 0.1% expense ratio.