I can’t give everything about money and investment so I would try and summarize something small about that in this article.

Definition of An ETF

From investopedia; An exchange -traded fund (ETF) is a collection of securities such as stocks that track an underlying index.

An ETF is known as exchange Traded fund because it is traded on an exchange similar to individual stock.

The price of an ETF’s shares will change throughout the day the trading was done, as the shares are bought and also sold on the market.

Before you can purchase shares in an exchange trade fund, you need a brokage account. The online platform, webill is a nice option. they offer free shares of stock when you are able to sign up it’s just like fre money.

Open – end mutual funds are similar to ETFs. They are also collection of securities. however they trade only once in a day after the market close.

By making a small investment in your brokage account, you attain an automatic ownership of a whole lot of dividend stocks rather than only one.

So VYM provides diversification. This is an advantage of investing in an ETF. It is also a major difference buying a single stock against an ETF, like VYM.

Now we know something about ETF, lets do a research in terms of investment. And dig into our VYM ETF review.

VYM Tracks An Index

As our definition did mention ETFs track an underlying index. VYM tracks the FTSE high dividend yield index. Trading an index is a passive way of investing.

The FTSE index is comprised mainly of US based stocks that are characterized by higher than average dividend yield.

VYM ETF Overview

There is a clear indication of what our definition and explanation are getting into.

lets now head over to vanguard and try to see what they say about their own ETF.

vanguard states that VYM

  1. Seek to track performances of the FTSE high dividend yield index, which measures the investment returns of common stocks of companies characterized by high dividend yield.
  2. provide a convenient way to track the performance of the stocks which are forecasted to have above average dividend yield.

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