5 Best ETFs to Diversify Your Portfolio and Avoid Risks

3. Vanguard High Dividend Yield Index Fund (NYSE:VYM)

Vanguard High Dividend Yield Index Fund (NYSE:VYM) aims to track the performance of the FTSE High Dividend Yield Index, which consists of common stocks of companies with high dividend yields. The ETF follows a passively managed, full-replication approach. Vanguard High Dividend Yield Index Fund (NYSE:VYM) has an expense ratio of 0.06% and offers a 30 day SEC yield of 3.02% as of August 31. The ETF has a median market cap of $128.5 billion and 443 stocks in its portfolio. It is one of the best ETFs to diversify a portfolio, especially for income investors who are on the hunt for high dividend yields. 

Exxon Mobil Corporation (NYSE:XOM) is one of the premier holdings of Vanguard High Dividend Yield Index Fund (NYSE:VYM), occupying 2.94% of the total portfolio. On September 12, Piper Sandler analyst Ryan Todd maintained an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) but lowered the price target on the stock to $108 from $109. The analyst remains constructive on the integrated oils group, citing near-record distillate margins that will drive upside in refining estimates through the winter and into an “equally tight” 2023. 

Exxon Mobil Corporation (NYSE:XOM) was part of 72 hedge fund portfolios at the end of Q2 2022, compared to 83 in the last quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 47.5 million shares worth over $4 billion.