VYM Dividend Calculator
Calculate the power of high dividend yield reinvestment with Vanguard High Dividend Yield ETF (VYM)
The VYM Dividend Calculator helps you visualize the potential growth and income from investing in the Vanguard High Dividend Yield ETF (VYM). This ETF focuses on U.S. companies that pay above-average dividends. The calculator factors in your initial investment amount, share price, dividend yield, expected growth rates, and whether you choose to reinvest dividends (DRIP). It provides estimates for portfolio value, income generation, and the benefits of dividend compounding, helping you make informed decisions about your long-term investment strategy with VYM.
Investment Details
How much you plan to invest initially
Current price per share of VYM (latest price as of June 2025: ~$120.00)
Annual dividend payment per share for VYM
Annual dividend as percentage of share price (auto-calculated)
Additional amount you’ll invest each month
How long you plan to hold your investment
Dividend & Growth Settings
Estimated annual growth in VYM share price
Estimated annual growth in VYM dividend payments
Your marginal tax rate on VYM dividend income
How often dividends are distributed
Automatically reinvest dividends to purchase more shares
VYM Calculator Results
Enter your investment details and click “Calculate VYM Returns” to see results.
Final Portfolio Value
$0
Total Dividends Earned
$0
After Tax: $0
Final Annual Income
$0
After Tax: $0
Final Monthly Income
$0
After Tax: $0
Final Yield on Cost
0%
Break-even Point
N/A
With DRIP
$0
Final Portfolio Value
Total Dividends: $0.00
Total Shares:
Without DRIP
$0
Final Portfolio Value
Total Dividends: $0.00
Total Shares:
DRIP Advantage
$0
Portfolio Difference
0%
Percentage Gain
With DRIP: Growth Sources
Without DRIP: Growth Sources
Latest VYM Dividend Information & Calendar
Latest Paid Dividend (Q2 2025)
- Ex-Dividend Date: June 27, 2025 (Est.)
- Payment Date: June 30, 2025 (Est.)
- Quarterly Dividend: ~$1.05 per share (Est.)
🔗 Check VYM distributions and full dividend history (Vanguard official)
VYM Dividend Payment Schedule 2025 (Forecast)
| Time Period | Ex-Dividend Date | Payment Date | Estimated Amount |
|---|---|---|---|
| Q1 | March 21, 2025 | March 26, 2025 | ~$0.95 |
| Q2 | June 27, 2025 (Est.) | June 30, 2025 (Est.) | ~$1.05 |
| Q3 | September 20, 2025 (Est.) | September 25, 2025 (Est.) | ~$1.00 |
| Q4 | December 20, 2025 (Est.) | December 26, 2025 (Est.) | ~$1.00 |
Estimated amounts based on historical data; actual dividends may vary. Dates are estimates.
VYM Portfolio Overview
Updated Sector Weightings (As of May 31, 2025 – Estimated)
VYM diversifies across various sectors, focusing on U.S. companies that pay above-average dividends. The approximate weightings are:
Approximate weightings, exact figures vary slightly by data provider and date. Source: Vanguard, as of May 31, 2025.
Updated Top 10 Holdings (As of June 15, 2025—Estimated)
| Ticker | Company Name | Weight (%) |
|---|---|---|
| AVGO | Broadcom Inc. | 3.5% |
| JPM | JPMorgan Chase & Co. | 3.0% |
| XOM | Exxon Mobil Corp. | 2.8% |
| JNJ | Johnson & Johnson | 2.5% |
| PG | Procter & Gamble Co. | 2.3% |
| CVX | Chevron Corp. | 2.2% |
| BAC | Bank of America Corp. | 2.0% |
| HD | Home Depot Inc. | 1.9% |
| PFE | Pfizer Inc. | 1.8% |
| MRK | Merck & Co. Inc. | 1.7% |
Source: Vanguard, as of June 15, 2025. This is the most recent holding data available; top holdings are updated periodically.
Live VYM Market Data
Understanding VYM Dividend Investing
The VYM Dividend Calculator is designed to help investors estimate their potential income from investing in the Vanguard High Dividend Yield ETF. Here’s how to use this calculator effectively:
How to Calculate Dividend Income with VYM ETF
Enter Your Investment Details
Start by entering your initial investment amount and the current VYM share price. The calculator will automatically determine how many shares you can purchase. You can also specify any additional monthly investments you plan to make and select your investment timeframe in years.
Adjust Dividend Settings
Enter the current VYM dividend yield (approximately 2.89% as of May 2025). The calculator will automatically determine the annual dividend per share based on the current share price. You can adjust the estimated growth rates for both dividends and share price to model different scenarios.
Customize Tax and Reinvestment Options
Select whether you want to reinvest dividends through a DRIP (Dividend Reinvestment Plan) and enter your applicable dividend tax rate. For tax-advantaged accounts like IRAs or 401(k)s, you can set the tax rate to 0%.
Analyze Your Results
After clicking “Calculate” you’ll see a comprehensive breakdown of your potential dividend income, including: Total dividends received over the investment period, Annual dividend income in the final year, Yield on cost (dividend yield based on your original investment), After-tax dividend income, Year-by-year breakdown of your investment’s performance, Comparison between DRIP and non-DRIP investment strategies.
Example Scenario: Monthly Income from VYM
Let’s say you invest $10,000 in VYM with the current dividend yield of 2.89%:
- Annual dividend income: $289 ($10,000 × 2.89%)
- Monthly dividend income: $24.08 ($289 ÷ 12)
- Quarterly dividend income: $72.25 ($289 ÷ 4)
With dividend reinvestment enabled, your income and share count would grow over time, potentially accelerating your returns through the power of compounding.
Understanding VYM Dividend Yield and Its Impact on Your Investment
The Vanguard High Dividend Yield ETF (VYM) offers a solid dividend yield with a focus on sustainable, quality dividends. Here’s what makes VYM’s dividend yield unique and how it impacts your investment:
What Is VYM’s Dividend Yield?
VYM’s dividend yield represents the annual dividend payment as a percentage of the current share price. As of May 2025, VYM offers approximately a 2.89% dividend yield, which is higher than the S&P 500 average but lower than some other high-yield options.
How VYM Generates Its Yield
Unlike ETFs that use options strategies to enhance yield, VYM focuses purely on holding dividend-paying stocks:
- Stock Selection: VYM tracks the FTSE High Dividend Yield Index, which includes stocks with above-average dividend yields.
- Quality Focus: The fund emphasizes companies with histories of dividend payments and the financial strength to maintain them.
- Diversification: VYM holds over 400 stocks across various sectors, reducing risk through broad exposure.
The Relationship Between Yield and Share Price
It’s important to understand several key aspects of VYM’s yield:
- When VYM’s share price falls, its yield rises (assuming dividend payments remain constant).
- The fund has potential for both dividend growth and capital appreciation over time.
- VYM’s dividend typically grows at 6-7% annually, enhancing income over the long term.
VYM Dividend Reinvestment: How It Compounds Your Returns
Dividend reinvestment is one of the most powerful wealth-building strategies available to investors. When applied to a quality dividend ETF like VYM, the effects of compounding can be impressive over the long term.
How Dividend Reinvestment Works With VYM
- Each time VYM pays a dividend (typically quarterly), instead of receiving cash, the payment is automatically used to purchase additional shares of VYM.
- These additional shares then generate their own dividends in subsequent periods.
- Over time, your share count grows steadily without requiring any additional cash investment.
- This creates a “snowball effect” where each reinvestment leads to larger future dividend payments.
Compounding Power Illustrated
Consider two investors with identical $10,000 investments in VYM:
- Investor A: Takes Dividends in Cash
After 20 years, this investor might have the original investment (appreciated with market growth) plus all the dividend payments received. - Investor B: Reinvests All Dividends
After 20 years, this investor could have 30-40% more wealth than Investor A, depending on market conditions and dividend rates. The calculator above shows this difference clearly in the “DRIP Advantage” section, quantifying the benefit of reinvestment over your specified time period.
Dollar-Cost Averaging Effect & Reinvestment Tip
Another benefit of dividend reinvestment is automatic dollar-cost averaging. Since VYM typically pays quarterly dividends, your reinvestments happen regularly regardless of market conditions:
- When VYM’s share price is lower, your dividend buys more shares.
- When the share price is higher, you buy fewer shares.
- Over time, this tends to lower your average cost per share.
- For maximum compounding efficiency, consider holding VYM in tax-advantaged accounts like IRAs where dividends can be reinvested without creating immediate tax liabilities.
Tax Implications of VYM Dividends: How to Calculate After-Tax Income
Understanding the tax treatment of VYM’s distributions is essential for accurately projecting your after-tax returns and making informed investment decisions.
Calculating After-Tax Dividend Income
The basic formula for calculating your after-tax dividend income is:
After-Tax Dividend = Dividend Income $\times$ (1 – Tax Rate)
For example, if you receive $289 in annual dividends from VYM and are subject to a 15% tax rate on qualified dividends, your after-tax income would be $289 $\times$ (1 – 0.15) = $245.65.
Our calculator lets you input your estimated tax rate to see the impact on your returns. This helps provide a more realistic projection of your actual income.
Tax-Efficient Strategies for VYM Investors
- Hold in Tax-Advantaged Accounts: Consider holding VYM in IRAs, 401(k)s, or other tax-advantaged accounts to defer or potentially eliminate tax on dividends.
- Tax-Loss Harvesting: Offset dividend income tax liability by strategically realizing losses in other investments when appropriate.
- Important: Tax laws change frequently, and individual tax situations vary. Consider consulting a tax professional for personalized advice on how VYM dividends will impact your specific tax situation.
VYM vs. Other Dividend ETFs: Which Is the Best for Income Investors?
When evaluating VYM against other dividend-focused ETFs, it’s important to understand its unique characteristics and how it compares to alternatives in terms of yield, growth potential, and overall performance.
VYM vs. Popular Dividend ETFs
| Feature | VYM (Vanguard High Dividend Yield) | SCHD (Schwab U.S. Dividend Equity) | DVY (iShares Select Dividend) | HDV (iShares Core High Dividend) |
|---|---|---|---|---|
| Dividend Yield (Approx.) | 2.89% | 3.50% | 3.80% | 3.70% |
| Dividend Growth Rate | 6.7% | 8.9% | 4.5% | 3.4% |
| Number of Holdings | ~400 | ~100 | ~100 | ~75 |
| Strategy Focus | Broad high yield exposure | Quality + growth + yield | Highest yield emphasis | Stable high yield stocks |
| Distribution Frequency | Quarterly | Quarterly | Quarterly | Quarterly |
| Expense Ratio | 0.06% | 0.06% | 0.38% | 0.08% |
VYM’s Key Differentiators & Finding the Right Balance
- Broad Diversification: With around 400 holdings, VYM offers greater diversification than most dividend ETFs.
- Low Expense Ratio: At just 0.06%, VYM is among the lowest-cost dividend ETFs available.
- Balance of Current Yield and Growth: VYM offers a moderate current yield with solid dividend growth potential.
- Large Asset Base: With over $50 billion in assets, VYM provides excellent liquidity and stability.
Many investors find that combining VYM with other dividend ETFs creates a balanced approach:
- Use VYM as a core holding for broad dividend exposure.
- Add SCHD for higher dividend growth potential.
- Consider HDV or DVY for higher current income.
- International dividend ETFs like VYMI can add geographic diversification.
This approach balances current income with long-term growth potential while managing risk through diversification.
Common Mistakes to Avoid When Using the VYM Dividend Calculator
While the VYM Dividend Calculator is a powerful tool for projecting potential returns, it’s important to use it wisely. Here are common pitfalls to avoid when planning your dividend investment strategy:
Incorrect Dividend Yield Assumptions
- One of the most common errors is using outdated or inaccurate dividend information. The calculator defaults to current figures, but you should:
- Verify the current annual dividend per share from official Vanguard sources.
- Understand that the dividend yield percentage changes as the share price fluctuates.
- Remember that the absolute dividend amount (dollars per share) is more important for projections than the yield percentage.
- Using incorrect starting values can significantly skew your long-term projections.
Not Accounting for Taxes
- Tax implications can dramatically affect your actual returns, especially in taxable accounts.
- Be realistic about your dividend tax rate based on your tax bracket.
- Remember that qualified dividends (like most VYM dividends) receive preferential tax treatment.
- Consider the difference between pre-tax and after-tax returns when setting income goals.
- Setting the tax rate to 0% when investing in a taxable account will overstate your actual returns and could lead to financial shortfalls.
Ignoring Dividend Reinvestment Effects
- The power of dividend reinvestment is often underestimated.
- Without DRIP, you miss the compounding effect that can significantly boost long-term returns.
- Reinvested dividends often account for 30-40% of total returns over extended periods.
- Even if you plan to take dividends as income eventually, reinvesting during the accumulation phase maximizes your future income potential.
- Always compare both DRIP and non-DRIP scenarios to understand the full impact of your reinvestment decision.
Overestimating Growth Rates
- Optimism bias can lead to unrealistic projections.
- Using dividend growth rates significantly higher than VYM’s historical 6-7% range.
- Projecting share price appreciation beyond reasonable long-term market averages.
- Failing to account for economic cycles and potential periods of slower growth.
- Always run multiple scenarios including conservative estimates to establish a realistic range of outcomes rather than focusing on best-case scenarios.
Underestimating Holding Periods
- Dividend investing is most powerful over long time horizons.
- The compounding effect accelerates in later years.
- Short term projections often fail to showcase the true potential of dividend growth.
- Dividend strategies generally require patience to realize their full benefits.
- For retirement planning, use realistic timeframes that match your actual investment horizon, which may be decades for younger investors.
Frequently Asked Questions
When you enable DRIP for your VYM holdings, your brokerage automatically uses the dividend payments to purchase additional shares of VYM instead of depositing the cash into your account. This happens each time VYM pays a dividend (typically quarterly). The process continues automatically, allowing your investment to compound over time as you accumulate more shares, which in turn generate more dividends.
Most brokerages allow you to enable DRIP through your account settings. Look for a “dividend reinvestment” option in your account preferences or contact your broker directly. DRIP can typically be enabled for your entire portfolio or for specific securities like VYM. Once enabled, the process works automatically each time dividends are paid.
Yes, dividends are typically taxable in the year they are received, even if they are reinvested rather than taken as cash. In taxable accounts, you’ll need to report and pay taxes on these dividends. However, if you hold VYM in tax-advantaged accounts like IRAs or 401(k)s, you won’t pay immediate taxes on the dividends (though other tax rules may apply upon withdrawal).
The calculator uses historical data and your inputs to make projections, but future performance can vary significantly from past results. The default values for dividend growth and share price appreciation are based on VYM’s historical performance, but actual future results could be higher or lower. The calculator is best used as an educational tool to understand the potential power of dividend reinvestment rather than as a precise prediction of future returns.
Yield on cost (YOC) is calculated by dividing the current annual dividend by your original investment cost per share. As VYM increases its dividend over time, your YOC grows, even if the current market yield remains relatively stable. For example, if you bought VYM at $100 per share and the annual dividend grows to $5 over time, your YOC would be 5%, even if the current market yield is only 3%. This metric helps illustrate the benefit of long-term dividend growth investing, especially with a quality ETF like VYM that consistently raises its dividend payments.
VYM and SCHD have different approaches to dividend investing. Historically, SCHD has shown slightly higher dividend growth rates (8-9%) compared to VYM (6-7%). However, VYM offers broader diversification with around 400 holdings versus SCHD’s approximately 100 holdings. Many investors choose to hold both ETFs to balance their strengths. VYM provides broader market exposure with a moderate yield, while SCHD offers more focused exposure to quality dividend growers. The “better” choice depends on your specific investment goals, risk tolerance, and overall portfolio strategy.