compared to S&P 500 Index (SNPINDEX:^GSPC)this Vanguard High Dividend Yield ETF (NYSE: VYM) Gain greater exposure to finance, energy, industrials, consumer products and utilities. That’s been a winning formula in 2026, as losses in growth-focused sectors like technology and communications are weighing on the S&P 500, which is down 1.5% year to date, while the Vanguard High Dividend Yield ETF is up 5%.
The largest components of the Vanguard High Dividend Yield ETF are Broadcom (NASDAQ:AVGO)its yield is only 0.7% – far from the “high-yield” zone.
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But Broadcom just released a blowout report, with net revenue increasing by 29% year-on-year and net profit increasing by 34%.
That’s why having the Vanguard High Dividend Yield ETF anchored to Broadcom is one of the many qualities that make this ETF a great buy in March.
Broadcom is part of the Vanguard High Dividend Yield ETF because it was once a relatively stable semiconductor and networking company. It has also increased its dividend for 15 consecutive years, with a yield well above 2% for much of the period from 2018 to the end of 2023.
But Broadcom’s acquisition of VMware in November 2023, coupled with booming artificial intelligence (AI) chip and network revenue, transformed Broadcom’s business. AI revenue is expected to account for about half of Broadcom’s revenue in the upcoming second quarter of fiscal 2026. Artificial intelligence will soon become a major part of the overall business, and the company expects AI chip revenue to reach $100 billion in fiscal 2027.
Hyperscalers are building custom chips to lower costs and reduce reliance on a single supplier. Broadcom designs specific AI chips for different functions, such as AI training and inference. Its custom chips are combined with networking and connectivity hardware, including Broadcom Tomahawk switches and Jericho routers, designed to maximize bandwidth for AI clusters. Despite these advantages, research from The Motley Fool shows that AI developers are still building on NVIDIACUDA software platform and buy a lot of Nvidia GPUs.
Still, Broadcom’s high profit margins, diversified business, and track record of raising dividends make it a perfect dividend stock to build a portfolio around.
The Vanguard High Dividend Yield ETF is more about dividend growth than just yield. It won’t kick stocks out of the market just because yields are falling.
