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Vanguard Pares Fees on High Dividend ETF

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February 25, 2013 12:09 pm
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Vanguard, the third-largest U.S. ETF issuer, announced that has slightly lowered the annual expense ratio on the popular Vanguard High Dividend Yield ETF (NYSE: VYM). The new expense ratio on the ETF is 0.1 percent per year, down from 0.13 percent, according to a statement issued by Vanguard.

VYM’s new expense ratio equals $10 charged to investors for every $10,000 invested and makes the ETF cheaper than 92 percent of comparable funds, according to Vanguard.

VYM, which tracks the FTSE High Dividend Yield Index, is home to 432 stocks and a third of the ETF’s weight was devoted to its top-10 holdings at the end of January. At that time, VYM’s top-10 holdings were comprised entirely of Dow Jones Industrial Average members. The ETF’s top-three holdings are Exxon Mobil (NYSE: XOM), General Electric (NYSE: GE) and Microsoft (NASDAQ: MSFT).

Consumer staples receives the largest sector weight at 19.3 percent with energy next at 13.1 percent. Health care, industrials and financials also receive double-digit allocations.

News of lower fees is nothing new from Vanguard, an issue often viewed as the low-cost leader in the ETF space. In late December, the firm announced fee reductions on its suite of popular sector ETFs. A week before that, Vanguard pared fees on 11 of its bond and broader market equity ETFs.

For more on ETFs, click here.


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