Vanguard Value ETF vs. S&P 500: A Passive Income Perspective
The S&P 500 has long been a cornerstone of wealth-building, delivering annualized total returns of 9% to 10%. Yet, its declining dividend yield—now just 1.2%—reflects a shift toward growth stocks that often pay little or no dividends. Low-cost index funds like Vanguard's S&P 500 ETF (VOO) have democratized access, but income-focused investors may find better opportunities elsewhere.
The Vanguard Value ETF (VTV) emerges as a compelling alternative, targeting higher-yielding stocks often overlooked in the S&P 500's growth-heavy composition. With valuations stretched across major indices, the hunt for sustainable passive income is pushing investors toward value-oriented strategies.