Vanguard's two large dividend ETFs solve different problems. VYM starts with the higher yield, while VIG has delivered the stronger long-term total return.
As of September 30, 2026, Vanguard listed a 30-day SEC yield of 2.35% for VYM and 1.51% for VIG. Both funds charge 0.04% annually. On a $1 million investment, holding the yields constant would imply about $23,500 of yearly income from VYM and $15,100 from VIG, a difference of $8,400 before taxes.
That calculation is useful but incomplete. SEC yield changes over time, and investors can fund spending through both distributions and selective share sales. Over the 10 years through September, Vanguard reported annualized returns of 11.28% for VYM and 12.87% for VIG. A 1.59 percentage-point annual gap compounds meaningfully, although past performance does not guarantee another decade of leadership.
The portfolios explain much of the difference. VYM emphasizes stocks with above-average current dividend yields and has a large-cap value profile. VIG focuses on companies with records of growing dividends, which tends to favor stronger profitability and more technology exposure even when the starting yield is lower.
That creates distinct risks. VYM can be more sensitive to banks, industrial companies and other cyclical value sectors. VIG may carry more valuation risk because investors pay higher multiples for quality and growth. Neither fund is a substitute for bonds, and neither guarantees a rising quarterly payment.
A blended allocation can reduce style risk. It would preserve more income than VIG alone while retaining more dividend-growth exposure than VYM alone. Rebalancing would also force the investor to trim whichever style had appreciated faster, although it cannot prevent losses in a broad equity decline.
VYM is the clearer choice for an investor who wants more portfolio income without selling shares. VIG fits an investor who accepts a lower yield in exchange for a dividend-growth portfolio and historically faster compounding. A split allocation can reduce the need to make an all-or-nothing forecast about whether value or quality growth will lead next.