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Vanguard ETFs: High Yields, Mixed Returns
23 Oct
Summary
- VYMI returned 25% in one year, beating S&P 500.
- VNQ offers highest yield but minimal five-year growth.
- Rising rates impacted VNQ and VPU negatively.
As of October 21, 2026, three Vanguard Exchange Traded Funds (ETFs) presented yields ranging from 2.9% to 3.71%. However, their performance varied significantly, with only the Vanguard International High Dividend Yield ETF (VYMI) outperforming the iShares Core S&P 500 ETF (IVV) over the past year. VYMI achieved a 25% total return, exceeding IVV's 17%, and a five-year return of 88% versus IVV's 83%.
The Vanguard Real Estate ETF (VNQ) offered the highest trailing yield at 3.7% but delivered a meager 4% total return over the past year and a mere 3% over five years, significantly lagging the S&P 500. Similarly, the Vanguard Utilities ETF (VPU) had the lowest yield at 2.9% and lost 6% over the past year, with its five-year return at 45% falling short of the S&P 500's 83% gain.
Rising interest rates played a crucial role in these diverging performances. With the 10-year Treasury yield at 5.2%, investors found safer alternatives to VNQ and VPU. These sectors, reliant on borrowing, faced increased costs and outflows. VYMI's performance, however, was influenced by foreign economies and currency exchange rates, offering a different risk-reward profile for income-seeking investors.
