A Vanguard exchange-traded fund, or ETF, is a type of fund offered by Vanguard which, like other ETFs, brings together the diverse benefits and characteristics of mutual funds and the convenience in trading of regular stocks. These ETFs also offer lower minimum investment requirements, alongside real-time pricing, making the experience of trading in them much like the experience of trading in regular stocks like Pepsico, Inc. (NASDAQ: PEP), Exxon Mobil Corporation (NYSE: XOM), Target Corporation (NYSE: TGT), and Chevron Corporation (NYSE: CVX), among others.
According to a Bloomberg article from this July, Vanguard ETFs are leading the fray so far in 2021, resulting in Wall Street practically surrendering to the “$500 billion ETF rush”. This July, Bloomberg noted that ETFs brought in more money in the seven months ending in July than ever seen before, valued at about $488.5 billion. The highly optimistic performance of these investment vehicles thus naturally resulted in more investors vying for a spot in the ETF trade, particularly in light of the fact that these funds are cheaper, more convenient, and more tax-efficient investment options. The resulting popularity of ETFs has thus also led to players like the Vanguard Group gaining significantly more relevance in the market. The move towards investing in ETFs has been so striking that Eric Balchunas, a Business Intelligence ETF analyst, was noted to have commented that investing strategies are undergoing a “format change” where, like people went from using CDs to streaming services, investors are now moving from regular stocks to ETFs.
To add to the above, the article mentions of as of July 2021, US fund assets reached the $6.6 trillion mark, a significant rise from the $3.7 trillion figure recorded at 2020’s peak selloff. During the last year alone, ETFs were responsible for bringing in about $497 billion in new cash as well. On the other hand, other investment options like mutual funds displayed their comparative performance through net withdrawals of about $506 billion. These varied performances, particularly when compared to one another, demonstrate both how and why ETFs are becoming investor favorites as 2021 progresses.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let’s take a look at the 10 best Vanguard dividend ETFs for passive income.
Our Methodology
We have selected Vanguard ETF dividend stocks with yields going up to over 3%. Insider Monkey tracks hedge fund data for about 873 hedge funds as of the second quarter of 2021, and we have also used this data to select stocks more popular among hedge funds today. For each stock we have mentioned its yield, ranking them from the lowest to the highest dividend yield. We have mentioned each stock’s performance in the past year relative to the S&P 500 as well.
Best Vanguard Dividend ETFs for Passive Income
10. Vanguard Mid-Cap Index Fund ETF Shares (NYSE: VO)
Number of Hedge Fund Holders: 3
Dividend Yield: 1.2%
Vanguard Mid-Cap Index Fund ETF Shares (NYSE: VO), an exchange-traded fund, invests in growth and value stocks of mid-cap companies and tracks the performance of the CRSP US Mid Cap Index through the full replication technique. The fund ranks 10th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard Mid-Cap Index Fund ETF Shares (NYSE: VO) was 39.26%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 41.26%, compared to a total return of 10.40% for the S&P 500. Vanguard Mid-Cap Index Fund ETF Shares (NYSE: VO) has gained 15.13% in the past 6 months and 21.47% year to date.
By the end of the second quarter of 2021, 3 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard Mid-Cap Index Fund ETF Shares (NYSE: VO), worth about $28 million. This is compared to 6 hedge funds in the previous quarter as well, with stakes valued at approximately $33 million.
Like Pepsico, Inc. (NASDAQ: PEP), Exxon Mobil Corporation (NYSE: XOM), Target Corporation (NYSE: TGT), and Chevron Corporation (NYSE: CVX), Vanguard Mid-Cap Index Fund ETF Shares (NYSE: VO) is a notable investment option among investors today.
9. Vanguard Total Stock Market Index Fund ETF Shares (NYSE: VTI)
Number of Hedge Fund Holders: 12
Dividend Yield: 1.2%
Vanguard Total Stock Market Index Fund ETF Shares (NYSE: VTI) invests in public equity markets in the US, and growth and value stocks of companies across diversified market capitalizations and sectors. It tracks the performance of the CRSP US Total Market Index using the representative sampling technique, and ranks 9th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard Total Stock Market Index Fund ETF Shares (NYSE: VTI) was 33.93%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 35.89%, compared to a total return of 10.40% for the S&P 500. Vanguard Total Stock Market Index Fund ETF Shares (NYSE: VTI) has gained 16.88% in the past 6 months and 21.70% year to date.
By the end of the second quarter of 2021, 12 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard Total Stock Market Index Fund ETF Shares (NYSE: VTI), worth about $120 million. This is compared to 11 hedge funds in the previous quarter as well, with stakes valued at approximately $106 million.
Like Pepsico, Inc. (NASDAQ: PEP), Exxon Mobil Corporation (NYSE: XOM), Target Corporation (NYSE: TGT), and Chevron Corporation (NYSE: CVX), Vanguard Total Stock Market Index Fund ETF Shares (NYSE: VTI) is a notable investment option among investors today.
8. Vanguard S&P 500 ETF (NYSE: VOO)
Number of Hedge Fund Holders: 13
Dividend Yield: 1.3%
Vanguard S&P 500 ETF (NYSE: VOO) invests in large-cap growth and value stocks of companies across diversified sectors. The fund is ranked 8th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard S&P 500 ETF (NYSE: VOO) was 31.26%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 33.28%, compared to a total return of 10.40% for the S&P 500. Vanguard S&P 500 ETF (NYSE: VOO) has gained 18.26% in the past 6 months and 22.43% year to date.
By the end of the second quarter of 2021, 13 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard S&P 500 ETF (NYSE: VOO), worth about $1.006 billion. This is compared to 13 hedge funds in the previous quarter as well, with stakes valued at approximately $888 million.
Like Pepsico, Inc. (NASDAQ: PEP), Exxon Mobil Corporation (NYSE: XOM), Target Corporation (NYSE: TGT), and Chevron Corporation (NYSE: CVX), Vanguard S&P 500 ETF (NYSE: VOO) is a notable investment option among investors today.
7. Vanguard Balanced Index Fund Admiral Shares (NASDAQ: VBIAX)
Number of Hedge Fund Holders: N/A
Dividend Yield: 1.4%
Vanguard Balanced Index Fund Admiral Shares (NASDAQ: VBIAX) invests in American public equity and fixed income markets and stocks of large-cap, mid-cap, small-cap, and micro-cap companies. The fund ranks 7th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard Balanced Index Fund Admiral Shares (NASDAQ: VBIAX) was 31.04%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 34.89%, compared to a total return of 10.40% for the S&P 500. Vanguard Balanced Index Fund Admiral Shares (NASDAQ: VBIAX) has gained 10.56% in the past 6 months and 11.74% year to date.
Like Pepsico, Inc. (NASDAQ: PEP), Exxon Mobil Corporation (NYSE: XOM), Target Corporation (NYSE: TGT), and Chevron Corporation (NYSE: CVX), Vanguard Balanced Index Fund Admiral Shares (NASDAQ: VBIAX) is a notable investment option among investors today.
6. Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE: VIG)
Number of Hedge Fund Holders: 12
Dividend Yield: 1.5%
Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE: VIG) invests in dividend-paying, growth, and value stocks of companies across diversified market capitalizations and tracks the performance of the Nasdaq US Dividend Achievers Select Index, using the full replication technique. The fund ranks 6th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE: VIG) was 25.28%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 27.45%, compared to a total return of 10.40% for the S&P 500. Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE: VIG) has gained 14.13% in the past 6 months and 15.92% year to date.
By the end of the second quarter of 2021, 12 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE: VIG), worth about $115 million. This is compared to 11 hedge funds in the previous quarter as well, with stakes valued at approximately $110 million.
Like Pepsico, Inc. (NASDAQ: PEP), Exxon Mobil Corporation (NYSE: XOM), Target Corporation (NYSE: TGT), and Chevron Corporation (NYSE: CVX), Vanguard Dividend Appreciation Index Fund ETF Shares (NYSE: VIG) is a notable investment option among investors today.
5. Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ: BND)
Number of Hedge Fund Holders: 6
Dividend Yield: 2%
Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ: BND) invests in American fixed income markets and investment-grade debt securities including government, corporate, and international dollar-denominated bonds, among other financial assets. The fund ranks 5th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, total return for Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ: BND) was 0.39%, compared to a total return of 10.40% for the S&P 500. Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ: BND) has gained 1.53% in the past 6 months.
By the end of the second quarter of 2021, 6 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ: BND), worth about $24 million. This is compared to 6 hedge funds in the previous quarter as well, with stakes valued at approximately $90 million.
4. Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE: VEA)
Number of Hedge Fund Holders: 11
Dividend Yield: 2.4%
Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE: VEA) invests in growth and value stocks, and tracks the performance of the FTSE Developed All Cap ex US Index, using the full replication technique. The fund ranks 4th on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE: VEA) was 28.81%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 32.31%, compared to a total return of 10.40% for the S&P 500. Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE: VEA) has gained 10.56% in the past 6 months and 12.43% year to date.
By the end of the second quarter of 2021, 11 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE: VEA), worth about $669 million. This is compared to 11 hedge funds in the previous quarter as well, with stakes valued at approximately $759 million.
3. Vanguard Real Estate Index Fund ETF Shares (NYSE: VNQ)
Number of Hedge Fund Holders: 11
Dividend Yield: 3%
Vanguard Real Estate Index Fund ETF Shares (NYSE: VNQ) invests in the REIT, financials, diversified financials, and real estate sectors. The fund tracks the performance of the MSCI US Investable Market Real Estate 25/50 Index, using the full replication technique, and ranks 3rd on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard Real Estate Index Fund ETF Shares (NYSE: VNQ) was 29%. The fund’s total return was 36.76%, compared to a total return of 10.40% for the S&P 500. Vanguard Real Estate Index Fund ETF Shares (NYSE: VNQ) has gained 24.57% in the past 6 months and 32.82% year to date.
By the end of the second quarter of 2021, 11 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard Real Estate Index Fund ETF Shares (NYSE: VNQ), worth about $179 million. This is compared to 11 hedge funds in the previous quarter as well, with stakes valued at approximately $120 million.
2. Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ: VYMI)
Number of Hedge Fund Holders: N/A
Dividend Yield: 3.4%
Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ: VYMI) invests in dividend stocks, growth and value stocks, and the public equity markets of global-ex-US region. The fund ranks 2nd on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ: VYMI) was 27.99%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 32.95%, compared to a total return of 10.40% for the S&P 500. Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ: VYMI) has gained 6.28% in the past 6 months and 12.83% year to date.
1. Vanguard Energy Index Fund ETF Shares (NYSE: VDE)
Number of Hedge Fund Holders: 9
Dividend Yield: 3.6%
Vanguard Energy Index Fund ETF Shares (NYSE: VDE) invests in stocks of energy companies and growth and value stocks across diversified market capitalization. The fund tracks the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50, using the full replication technique. It ranks 1st on our list of the best Vanguard dividend ETFs for passive income.
In the past year, the price return for Vanguard Energy Index Fund ETF Shares (NYSE: VDE) was 46.11%, compared to a price return of 31.27% for the S&P 500. The fund’s total return was 52.51%, compared to a total return of 10.40% for the S&P 500. Vanguard Energy Index Fund ETF Shares (NYSE: VDE) has gained 31.06% year to date and 52.02% in the past year.
By the end of the second quarter of 2021, 9 hedge funds out of the 873 tracked by Insider Monkey held stakes in Vanguard Real Estate Index Fund ETF Shares (NYSE: VNQ), worth about $8.4 million. This is compared to 4 hedge funds in the previous quarter as well, with stakes valued at approximately $3.8 million.
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Disclosure: None. 10 Best Vanguard Dividend ETFs for Passive Income is originally published on Insider Monkey.
