Vanguard dividend ETF touted as hedge against tech dominance
The Vanguard High Dividend Yield ETF has posted a 10.2% year-to-date return, challenging the narrative that technology stocks are the sole drivers of market outperformance.
The Motley Fool published an analysis on 31 May 2026 highlighting the Vanguard High Dividend Yield ETF (VYM) as a strategic alternative to technology-heavy growth stocks. The article suggests that US value-oriented equities may provide a superior risk-return profile over the next five to ten years, citing Vanguard’s 2026 economic and market outlook which forecasts value stocks outperforming tech.
VYM holds 608 US large-cap value stocks and carries an expense ratio of 0.04%. The fund has delivered a 10.2% year-to-date return, alongside a 29.5% return over the past year and 17% over the past three years. Its dividend yield stands at 2.24%, a metric that contributed to its inclusion in The Motley Fool’s list of best dividend index funds.
The fund’s portfolio is dominated by non-technology sectors, with top holdings concentrated in pharmaceuticals, energy, and financial institutions. Major positions include JPMorgan Chase, which accounts for 3.34% of the fund, Johnson & Johnson at 2.3%, Procter & Gamble at 1.44%, and Coca-Cola at 1.28%.
Despite the value focus, the fund exhibits some concentration risk. As of 30 April 2026, Broadcom constitutes 8% of the fund’s assets, making it the top holding. The Motley Fool noted that this allocation renders the fund slightly top-heavy with a single technology stock, though it did not characterise this as a definitive deterrent for investors.
This analysis contrasts with the recent performance of the Nasdaq-100 index, which has returned approximately 19% year to date, 40% over the past year, and 119% over the past five years. The Motley Fool disclosed that it holds positions in Broadcom, JPMorgan Chase, and VYM, and recommends Johnson & Johnson. Conversely, its Stock Advisor team did not include VYM in its current list of ten best stocks, instead recommending individual growth names such as Netflix and Nvidia.
