Investing
VYM yields more, but VIG has returned more over the past decade
By Bear Creek Staff, . Bear Creek Capital Network.
Vanguard's High Dividend Yield ETF (VYM) pays a higher current yield than its Dividend Appreciation ETF (VIG), but VIG has delivered the higher total return over the past ten years. For a retiree choosing between them, that is the real decision: more income now, or a portfolio that has grown faster and would be drawn on partly by selling shares.
The two funds side by side
*The figures in this chart come from an analysis by Tony Dong, founder of ETF Portfolio Blueprint, published by 24/7 Wall St. on October 11, 2026. It does not give the date the yields were measured or the end date of the ten-year return period.
| Measure | VYM | VIG |
|---|---|---|
| 30-day SEC yield | 2.35% | 1.51% |
| Annualized total return, past 10 years | 11.28% | 12.87% |
| Expense ratio | 0.04% | 0.04% |
| Vanguard style category | Large-cap value | Large blend |
| Average price-to-earnings ratio | 20.7 | 25.3 |
| Average return on equity | 18.6% | 29.4% |
| Average earnings growth | 9.2% | 11.4% |
| Largest sector | Financials, 21.1% | Technology, 25.6% |
Two of those rows measure different things and should not be read against each other. The 30-day SEC yield is a standardized snapshot of the income a fund's holdings are producing now. The ten-year figure is a historical total return, meaning price change plus reinvested dividends, averaged per year. VYM's yield advantage is 84 basis points, or 0.84 percentage points.
What the income gap means in dollars
At those yields, a $1 million position would pay about $23,500 a year from VYM and about $15,100 from VIG, a difference of roughly $8,400. That is an illustration, not a forecast. SEC yields move as prices and payouts change, and neither fund guarantees a distribution.
Both funds charge 0.04% a year. Vanguard's own figures, as cited in the analysis, show that everything each fund paid out from income and short-term gains in 2025 was taxed as qualified dividends. How 2026 payouts will be treated is not yet known.
Where the portfolios differ
VIG's largest sector is technology at 25.6%, followed by financials at 22.1% and health care at 18.2%. VYM's largest is financials at 21.1%, with health care and industrials at roughly 13% each. VYM's holdings trade at a lower multiple but show slower earnings growth and lower returns on equity. Dong says that difference in growth and profitability helps explain part of the return gap.
What the analyst argues
Dong argues that retirees who plan to spend only dividends are judging the funds on the wrong measure. In his view, a retiree willing to fund withdrawals partly by selling shares should compare total return, which makes VIG's lower yield matter less.
He also disputes the idea that VYM is the more defensive fund, pointing to its weight in financials and industrials, sectors whose earnings tend to rise and fall with the economy. He says he would personally consider splitting money evenly between the two.
Our read
The numbers support a narrower point than either fund's marketing. Over this particular decade, VIG's tilt toward faster-growing companies was rewarded, and VYM's higher income did not make up the difference in total return. They do not show which fund will do better from here.
The trade-off
VYM offers more cash income today and a cheaper portfolio, and gives up some of the growth VIG has delivered. VIG offers holdings with stronger growth and profitability measures, and gives up current income, so a retiree relying on it would likely need to sell shares to fund spending. Which matters more depends on whether withdrawals will come from income alone or from total return.
Bear Creek Capital Network publishes content for informational and educational purposes only. Nothing in this article constitutes financial, investment, tax or legal advice, or a recommendation to buy or sell any security. Consider your own circumstances and consult a qualified professional before making financial decisions.