About Vanguard
Three days ago, news broke that the company’s founder, John Bogle, had passed away. He was 89 years old. I am deeply grateful to him for creating investment products that allow even ordinary people like me to diversify our investments across well-known companies at low management fees. Thank you very much.
Vanguard is headquartered in the United States. Founded in 1975, it launched its first index fund for individual investors in 1976 and has since become a leader in low-cost index investing. In Japan, it began offering services in 2000 as Vanguard Investments Japan. Please see below for details.
(Quoted from the Vanguard Japan website)
Unbelievably Low Management Fees
Above all, I believe the biggest appeal lies in the unbelievably low management fees.
(Quoted from the Vanguard Japan website)
Personally, I think a management fee of 0.11% is practically zero. And if the fund actively rebalances its portfolio to maintain an efficient asset allocation, isn’t this the best product for income-focused investors?
Incidentally, the management fee for VYM is 0.08%.
Top Holdings
Now, let’s look at the top holdings.
As expected, it includes the 2019 “Dogs of the Dow” and U.S. “Dividend Aristocrats.” These are stocks that many people tend to buy, but with an ETF, risks are diversified even if an individual company faces unforeseen circumstances, and I believe this mitigates the risk of falling stock prices or dividend cuts to some extent.
Next, here are the sector-by-sector weightings.
Financials, healthcare, and consumer goods are the top three sectors, but since no single sector is heavily weighted, I think the portfolio is well-balanced.
Stock Price Trends
VYM has also been affected by the decline in U.S. stocks since the end of last year, but when viewed over a 10-year period, it’s still on an upward trend. While the future direction of U.S. stocks remains uncertain, I plan to actively buy more if prices drop. During the Lehman Shock, the price was $25.05.
Here’s the stock price trend over the past month. The drop on December 24 was definitely a good buying opportunity… Well, there might be more downturns in the future, so I’ll work hard to grow my investment capital.
(Source: Reuters website)
Dividend Yield
VYM pays dividends four times a year: in March, June, September, and December. In 2018, the following amounts were paid per share.
The annual dividend is $2.64.With the current stock price at $82.15, the dividend yield as of January 19 is 3.26%. I think this is a yield that would be unthinkable for Japanese ETFs. What interests
me is the dividend payout during the Lehman Shock
. Although the Vanguard website only shows data starting from March 2009, I think it’s still a useful reference.
Even in 2009, following the Lehman Shock, the fund paid an annual dividend of $1.168, so even if you had bought at the high of $30.66 on February 1, 2009, the yield would have been 3.8%. Even if you had bought at $50 before the Lehman Shock, the yield would have been 2.3%.As a defensive ETF, it offers a good yield, and I think it’s a product that even beginner investors can buy with confidence. I’ll work hard to grow my seed money so that I can actively buy more if there’s a global
stock market crash!
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