Which Vanguard ETFs Offer the Highest Dividend Yields?

Source The Motley Fool

Investors can find plenty of great exchange-traded funds (ETFs) to generate income. Vanguard, one of the biggest fund managers around, offers 88 ETFs. All of them return money to shareholders via distributions.

Vanguard's bond ETFs currently pay the highest distributions. However, if you're looking for juicy dividends from Vanguard, you're also in luck. Which Vanguard ETFs offer the highest dividend yields?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

A digital display showing percentages, stock and line charts, and the word ETF.

Image source: Getty Images.

1. Vanguard Utilities ETF

The Vanguard Utilities ETF (NYSEMKT: VPU) ranks at the top of the list, with a U.S. Securities and Exchange Commission (SEC) yield of 2.98%. The SEC yield, by the way, is a metric developed by the SEC to help investors compare funds. It uses the projected dividend yield (for stock ETFs) over a trailing-30-day period.

It shouldn't be surprising that this Vanguard ETF offers the highest dividend yield. Utility stocks have been a long-time favorite for income investors. The Vanguard Utilities ETF owns 70 U.S. utility stocks. Its top holdings include NextEra Energy, Southern Company, Duke Energy, Constellation Energy, and Sempra Energy.

Many utility stocks have been sizzling hot over the last 12 months. So was the Vanguard Utilities ETF, which is up more than 20%. That's over twice the average return for the fund since its inception in early 2004. Surging energy demand from data centers, fueled by organizations jumping on the generative artificial intelligence (AI) bandwagon, and the anticipation of Federal Reserve interest rate cuts served as key catalysts.

VPU Chart

VPU data by YCharts.

As is the case with most Vanguard funds, your costs of owning this ETF are minimal. The Vanguard Utilities ETF's annual expense ratio of 0.1% is much lower than the 0.99% average expense ratio of similar funds.

2. Vanguard Energy ETF

The Vanguard Energy ETF (NYSEMKT: VDE) is running neck-and-neck with the Vanguard Utilities ETF. Its SEC yield is 2.97%. The yields of the two funds are so close that they could easily swap positions multiple times over the coming months.

As its name indicates, this Vanguard ETF focuses on the energy sector. It owns 112 energy stocks with top holdings including ExxonMobil, Chevron, ConocoPhillips, EOG Resources, and Williams Companies.

Since its inception in September 2004, the Vanguard Energy ETF has delivered an average annual return of 7.15%. However, the ETF has beaten that average over the last 12 months. It hasn't been a steady upward climb, though. Fluctuating oil prices have contributed to significant volatility for the fund.

VDE Chart

VDE data by YCharts.

Don't be surprised if the rollercoaster ride continues in 2025. The second Trump administration's focus on deregulation and corporate tax cuts could help the energy sector. However, if domestic oil production increases too much, oil prices could fall and drag the Vanguard Energy ETF down.

3. Vanguard High Dividend Yield ETF

You'd think an ETF named Vanguard High Dividend Yield ETF (NYSEMKT: VYM) to provide attractive dividends. And you'd be right. This ETF offers an SEC yield of 2.68%.

The Vanguard High Dividend Yield ETF attempts to track the performance of the FTSE High Yield Dividend Index, which focuses on U.S. large-cap stocks with high dividend yields. The ETF's portfolio includes 537 stocks with a median market cap of $148.5 billion. Its top five holdings are Broadcom, JPMorgan Chase, ExxonMobil, Procter & Gamble, and Walmart.

Large-cap stocks have driven the current bull market. Although the Vanguard High Dividend Yield ETF hasn't performed as well as the S&P 500 over the last 12 months, the fund has delivered a solid return significantly above its average gain of 8.61% since its inception in November 2006.

VYM Chart

VYM data by YCharts.

This ETF is even more cost-effective than the other two Vanguard ETFs with the highest dividend yields. Its annual expense ratio is a low 0.06%, only a fraction of the 0.89% average expense ratio of similar funds.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $357,084!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,554!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $462,766!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of January 13, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Keith Speights has positions in Chevron, ExxonMobil, and Williams Companies. The Motley Fool has positions in and recommends Chevron, EOG Resources, JPMorgan Chase, NextEra Energy, Vanguard Whitehall Funds - Vanguard High Dividend Yield ETF, and Walmart. The Motley Fool recommends Broadcom, Constellation Energy, and Duke Energy. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Coinbase launches futures on new index tied to Apple, Microsoft, Nvidia, Tesla, and BlackRockCoinbase is launching a new futures contract that will track the price of both U.S. tech stocks and crypto ETFs in a single product.
Author  Cryptopolitan
23 hours ago
Coinbase is launching a new futures contract that will track the price of both U.S. tech stocks and crypto ETFs in a single product.
placeholder
EUR/USD dips further against a firmer US Dollar on renewed debt fearsThe EUR/USD pair is heading south for the second consecutive day on Wednesday, trading at 1.1620 at the time of writing.
Author  FXStreet
22 hours ago
The EUR/USD pair is heading south for the second consecutive day on Wednesday, trading at 1.1620 at the time of writing.
placeholder
Silver Price Forecast: XAG/USD marks fresh 14-year highs near $41.00Silver price (XAG/USD) following its six-day winning streak, trading around $40.98 per troy ounce on Wednesday, the highest since September 2011.
Author  FXStreet
21 hours ago
Silver price (XAG/USD) following its six-day winning streak, trading around $40.98 per troy ounce on Wednesday, the highest since September 2011.
placeholder
US JOLTS Job Openings expected to edge slightly lower in JulyThe Job Openings and Labor Turnover Survey (JOLTS) will be released on Wednesday by the United States (US) Bureau of Labor Statistics (BLS).
Author  FXStreet
21 hours ago
The Job Openings and Labor Turnover Survey (JOLTS) will be released on Wednesday by the United States (US) Bureau of Labor Statistics (BLS).
placeholder
Wall Street Giants Poised to Offer Spot Bitcoin and Ethereum TradingThe Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) alluded to major exchanges being able to roll out spot Bitcoin (BTC) and Ethereum (ETH) trading.
Author  Beincrypto
20 hours ago
The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) alluded to major exchanges being able to roll out spot Bitcoin (BTC) and Ethereum (ETH) trading.
goTop
quote