VYM tracks top-yielding stocks with low expenses; may dilute overall yield for investors.

The Vanguard High Dividend Yield ETF (VYM) may seem focused on dividend yield, but its actual benefit lies in tracking the FTSE High Dividend Yield index, selecting top-yielding stocks, and weighting by market cap with a low expense ratio of 0.06%. However, its large portfolio of over 550 stocks may dilute overall yield.

While the Vanguard High Dividend Yield ETF offers diversification, its large number of stocks can lower overall yield. For investors seeking passive income, this ETF may not be the best fit due to dilution of yield. Consider other options for maximizing income generation in your portfolio.

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Read more at Yahoo Finance: VYM Is a Popular Dividend ETF for Passive Income. But Is It the Best?