New exchange-traded funds (ETFs) with specialized strategies have been the rage on Wall Street — and the rage continues.
Targeting income-oriented investors, Vanguard has just introduced the High Dividend Yield ETF (Amex: VYM).
The fund tracks a customized index developed by the FTSE Group for Vanguard. The index is drawn from the U.S. component of the FTSE Global Equity Index Series and consists of stocks with higher-than-average dividend yields. Real estate investment trusts (REITs) and companies that have not paid a dividend during the previous 12 months are excluded. The expense ratio is 0.25 percent and the fund plans to pay quarterly dividends.
Jerry Moskowitz, managing director of FTSE Americas, says: “Working with Vanguard to create this new custom benchmark helps to demonstrate FTSE’s skill in developing index solutions in line with investor and product issuer needs.”