VYM: Challenging The 'Boring' In The Dividend Investing Narrative

Dividend investing may not be the most exciting or glamorous way to invest these days. However, when considering the attributes this space offers, such as decreased volatility, healthy yields, moderate risk exposure and a hedge against downside risk, it may be an ideal synergy for any long portfolio. Historically, companies that have an established track record of not only paying dividends but growing their dividends over the long-term have generally outperformed the their index with decreased volatility. The Vanguard High Dividend Yield ETF (NYSEARCA:VYM) is a high quality domestic large-cap centric portfolio that may prove to be a meaningful piece of an overall growth retirement strategy while providing a reasonable level of income. This broad portfolio offers access to all sectors throughout the large-cap space without sacrificing diversification and in turn can generate sustained long-term growth and income.

VYM makes a compelling case for the risk-adverse investor seeking long-term growth and income from a cohort high-quality dividend paying companies. Morningstar has a 5-year rating of 5-stars with a risk rating of below average and a return rating of high. VYM has an expense ratio of only 0.10% and a dividend yield of 2.8%, thus offering access to a high-quality ETF with a healthy rate of return and minimal risk at a very low cost. The mitigating risk aspect is exemplified during bear markets where VYM outperformed the S&P 500 4.9% and 8.4%, respectively in 2008 and 2014. VYM provides a compelling investment opportunity for investors seeking diversity across the large-cap space while mitigating risk and attaining a high yield and overall equity appreciation.

Source: Seeking Alpha

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