Why This Vanguard Dividend ETF Could Make You Miss Out on the Long-Term Upside of Dividend Stocks
There's a lot to like about exchange-traded funds (ETFs), and there's a lot to like about high yield stocks. However, marrying the two in the form of Vanguard High Dividend ETF (NYSEMKT: VYM) sounds better than it actually is for dividend-focused investors. Here's why investors looking to live off dividend payments will probably want to stick to individual stocks instead.
Vanguard High Dividend ETF is a passively managed exchange-traded fund. That means it blindly tracks an index, in this case the FTSE High Dividend Yield Index. Vanguard, however, doesn't make it easy to understand what's happening at the index level. Even the prospectus is shockingly shy on details.
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Source Fool.com
