- The Vanguard Dividend Appreciation ETF (VIG) and Vanguard High Dividend Yield Index Fund ETF (VYM) are both popular choices for dividend investors.
- About 2 months ago, we recommended both are ok to hold.
- We currently see a risk alert for both as treasury rates surge and push the yield spread to the thinnest level in a decade.
- In relative terms, VIG and VYM are valued at their historical average against each.
- Now, we see the underlying dynamics changing and recommend investors hedge their positions and begin to include (or increase) treasury bonds in their portfolios.
For further details see:
VIG And VYM: Risk Alert As Treasury Rates Pressure Valuation