VYM vs VIG

[explanade]

A total return focus has beat out a dividend focus in the past, at least for indices.

As the Great Recession taught everyone, companies have no qualms about cutting or eliminating dividends altogether when times get tough.

Even though the conventional wisdom in the years before the GR was that they wouldn't.

Would it be worth complementing say market index funds with some dividend ETFs or mutual funds?

To withdraw dividends as cash at some point?

 

[DjBrown]

For me, correlations can help find a lack of diversification from two assets that are overly correlated. Someone investing in both VYM and SCHD should be aware they are very similar ETFs.

Overlap is in 89 holdings. SCHD is total 100-102 so yes overlap is significant.

SCHD holds best of VYM holdings. That is why it significantly outperformed VYM. So in performance they are not correlated at all

 

[target2019]

I suggest that Schwab isn't basing their ETF on Vanguard Whitehall offering.

The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Dividend 100™ Index.

VYM follows a different index.

Seeks to track the performance of the FTSE® High Dividend Yield Index, which measures the investment return of common stocks of companies characterized by high dividend yields.

 

[Time2]

Would it be worth complementing say market index funds with some dividend ETFs or mutual funds?

To withdraw dividends as cash at some point?

I think that depends on your assets in tax deferred, your SS, any pensions and your spending and where your RMDs will put you tax wise.
I'm staying away from dividends as I don't want any additional forced income that will drive me above my spending and add to my taxes. I'm not at RMD age yet, but looking at those, makes me not want dividends.

 

[explanade]

No pensions yet and won't be taking RMDs for awhile.

But I've been just living on dividends including VIG for the past 5 years or so, no actual redemptions, so the value of the shares have really grown a lot in this period.

Probably means I should be redeeming more before SS and RMDs.

But I'm also looking at investments for others, who do not have much income. Though arguably, they should probably look to withdraw in the next 5-7 years as well.

 

[freedom2022]

Thank you all for responding.
With interest rate hikes, most likely stocks will go sideway in the long term.
I think VYM is a good bet for long term holding with high dividend yield.