The BEST Index Fund to Make MILLIONS – Vanguard VHYL ETF

Hello folks, and welcome to what might just be one of the most exciting reads if you’re interested in generating both immediate income and long-term growth through the stock market. My name’s Mark, I’m an entrepreneur and property investor, and today I’m going to walk you through one of my all-time favorite Exchange Traded Funds (ETFs): Vanguard’s VHYL – the Vanguard All-World High Dividend Yield ETF.

Now, before you start imagining yourself driving a Ferrari down a private road financed by your (soon-to-be) massive dividends, I want to set the stage for why I think VHYL is simply a must-have for someone who’s serious about global investing. We’ll talk about its dividend yield, its diversification benefits, and the returns it has produced over the past decade. We’ll also tackle some of the mental aspects of investing, the hidden value of diversification across regions and sectors, and the crucial importance of not putting all your eggs in one basket.

Throughout this blog post, I’m going to share my personal experiences and thought process, so you’ll get an idea of why VHYL has become such a large proportion of my own portfolio—and why it might become a permanent staple in yours. So, let’s dive right in!

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1. Why Dividends Matter More Than You Might Think

Most people who look at stocks or funds focus on the potential for capital appreciation—basically, that moment when you buy an asset, hold on for dear life, and hope it’ll be worth a lot more in the future. That’s absolutely part of the game. But if you’re anything like me, you also want to see some immediate returns that can hit your pocket now, not just when you eventually sell.

A Little Bit Today, A Little Bit Tomorrow

For me, this investing mindset is actually influenced by my background in property. I’ve invested in real estate for years—about £3.5 million worth of properties, to be exact. With real estate, you get:

1. Rental Income (the “little bit today”): This is the profit left over each month after the tenants pay rent, once I’ve paid the mortgage, insurance, property taxes, and maintenance.
2. Capital Appreciation (the “little bit tomorrow”): Over time, property tends to go up in value, adding that long-term growth boost to my net worth.

This model works so well in property that I try to replicate the same dynamic in stocks. I want consistent dividends (that “little bit today”) plus the potential for growth (the “little bit tomorrow”). That’s why I love Vanguard’s VHYL ETF: it’s designed to pick stocks from around the globe that pay above-average dividends, so I get a steady stream of income, plus I can still enjoy market-driven capital gains.

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2. The Charm of Vanguard VHYL

VHYL stands for Vanguard’s All-World High Dividend Yield ETF. Quite a mouthful, but it does what it says on the tin: invests in companies around the globe that pay high dividends. Here’s why it’s a major staple in my portfolio:

1. Solid Dividend Yield (Around 3.5%)
   As of this writing, VHYL is dishing out roughly a 3.5% dividend yield. That means if you invest £100,000, you can expect around £3,500 in dividend income each year. And if it’s in a tax-advantaged account (like an ISA in the UK), that money’s tax-free.
2. Global Diversification
   This ETF invests in companies across different regions, industries, and markets. In broad terms, its current allocation looks something like:
   • United States: ~47.5%
   • Europe: ~25%
   • Pacific: ~15%
   • Emerging Markets: ~11%

   The beauty of this spread is that if one region goes through tough economic times, the others might offset some of those losses. Russia/Ukraine conflict messing with certain European stocks? Your US holdings might still buoy your portfolio. If US tech takes a dip, maybe emerging markets or European markets do well. You get the picture.

3. Resilience Over Time
   VHYL has shown about 80% growth over 10 years. Of course, past performance doesn’t guarantee future results, but that’s a track record that proves it can weather the ups and downs of the market while providing consistent dividends. Combine that 80% growth with the ongoing 3.5% dividend yield, and you’re looking at an annualized return that often flirts with double digits.
4. Low Fees
   Vanguard is legendary for its low-cost approach to investing. VHYL’s fee is around 0.29% per year. On top of that, depending on your investing platform, you might pay a modest flat fee or a percentage fee. On Hargreaves Lansdown, for instance, once your stock and ETF holdings exceed £10,000, they charge £45 a year as a platform fee for shares. That’s capped, which is great. Add it all up, and you’re paying very little on the large sums you might eventually accumulate.

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3. Portfolio Integration: How VHYL Fits Into My Strategy

Let’s talk practicalities. How does one actually blend VHYL into a portfolio, especially if you’ve got a variety of other holdings (properties, businesses, or other ETFs)?

My Personal Allocation

I’m an entrepreneur running my own businesses, I hold stakes in private ventures, and I’ve got my real estate portfolio. So when it comes to stocks, I focus on diversification—both geographically and sector-wise. Within my stock market holdings, VHYL occupies a pretty significant chunk. Why? Because the fund checks off multiple boxes at once:

• Income: The 3.5% yield is substantial enough that, should I decide to rely on my stock portfolio for monthly bills, I can skim off that dividend income.
• Growth Potential: Over 10 years, it’s returned a combined growth near 80%, and if you add dividends, that’s even higher.
• Simplicity: Instead of me trying to pick the “next big thing” or worrying about whether I should sell my Apple or Google shares at a particular time, I rely on Vanguard’s diversified approach. They select a basket of high-dividend payers around the globe, and I get to enjoy the ride without micromanaging.

Diversification Is More Than Just Spreading Out

We often hear the word “diversification” tossed around as if it automatically solves everything. But it only works if you truly diversify across different asset classes, geographic areas, and economic sectors. In my case:

• Property: Cash flow from rent + appreciation over time.
• Businesses: If my private companies do well, great; if not, my stock or property holdings might cushion the blow.
• Stocks/ETFs: Provide global exposure to industries like energy (Exxon Mobil), consumer goods (Nestle, Toyota), finance (JP Morgan), and more.

If you compare that to someone who only invests in US tech, or only invests in UK property, you’ll see that my risk is spread far wider. If one region or industry dips, the others might remain strong. That’s the real beauty of diversification.

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4. The Mental Game of Investing

Let’s face it: most of investing, especially in volatile times, is emotional. We can stare at spreadsheets, earnings reports, and inflation statistics until we’re blue in the face, but if our mental game isn’t strong, we might end up making panic-driven decisions.

Long-Term Consistency

One reason a robust dividend fund like VHYL can be so comforting is that it pays you regularly—even if the broader market is in turmoil. That recurring income can help you resist the urge to sell in a panic, because no matter what the share price is doing, that dividend check comes rolling in (so long as companies in the fund keep paying dividends).

Dollar-Cost Averaging (Or Pound-Cost Averaging)

Another mental hack to keep you invested over the long haul is dollar-cost averaging. By buying a fixed amount every month, you smooth out the volatility of the market. When prices are high, your monthly contribution buys fewer shares; when prices are low, your money buys more. Over time, you’re likely to end up with a decent average cost—and your dividends will keep rolling.

Focus on the Big Picture

The biggest enemy to investing is usually ourselves. The minute the market dips, or the second a sensational headline warns of a global downturn, some people jump ship. But the historical trend, at least for broad indexes and well-diversified portfolios, is upward growth. High dividend-paying stocks are often more mature, established businesses, meaning they’re more stable and less prone to catastrophic falls—though no investment is 100% guaranteed safe.

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5. Tackling VHYL’s Key Details

To help you decide if VHYL might fit into your own portfolio, let’s do a quick breakdown of its top constituents, yield, fees, and typical approach.

Top Holdings

If you skim through the top holdings of VHYL, you might see familiar giants like:

• ExxonMobil (Energy)
• Johnson & Johnson (Healthcare)
• JP Morgan (Banking)
• Nestle (Food & Beverage)
• Toyota (Automotive)

These companies are often household names, deeply established in their industries. That’s part of what lends VHYL its stability—these aren’t speculative start-ups; they’re the big dogs that pay consistent dividends.

Dividend Yield & Growth

As mentioned, the dividend yield hovers around 3.5%, though it can fluctuate with market conditions and the fund’s composition. Over the last decade, there’s also been about an 80% growth in the fund’s share price. No, it doesn’t go straight up every month, but over time, that’s been a pretty good ride. Combined, your total returns (dividends + appreciation) could flirt with the 10% annual range. Of course, the future could differ, but historically, that’s a healthy return without taking on crazy risk.

Cost

VHYL’s expense ratio is about 0.29%, which is fairly low for the level of global diversification you’re getting. If you’re on a platform like Hargreaves Lansdown, once your ETF holdings exceed £10,000, you pay a flat £45 a year. That’s essentially peanuts if you’ve got a significant sum invested.

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6. Real-World Returns: A Quick Illustration

Let’s paint a hypothetical scenario. Suppose you and your partner manage to build a combined portfolio of £500,000 in VHYL inside your ISAs. If the dividend yield remains steady at around 3.5%, you might get:

• £17,500 a year (3.5% of £500,000)
• Or about £1,458.33 per month in dividend income

And since it’s in your ISA, that’s tax-free income. Think about how that compares to a 9-to-5 job, or how it could supplement your retirement. It’s not a guarantee of wealth beyond imagination, but it’s a comfortable cushion that might allow you more freedom.

Now, if over time, the fund also appreciates in value—remember the 80% over 10 years figure—your original £500,000 might turn into £900,000 (plus you’ve collected dividends all along). That’s the beauty of a “little bit for now, a little bit for tomorrow” approach.

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7. The Subscriber Dividend Portfolio Concept

I know this might sound like an aside, but there’s a strategy I love called the Subscriber Dividend Portfolio—it’s basically a community-driven portfolio that invests in dividend-paying companies or funds. Each month, the dividends are tallied up and paid out to a lucky subscriber’s bank account.

Why mention this? Because it illustrates the power of consistent dividend income, especially when a portfolio grows over time. Even a relatively small sum can turn into hundreds or thousands of pounds of dividends over time. As your principal compounds, the monthly or quarterly dividend checks get bigger, and so does your financial flexibility.

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8. Potential Risks & Considerations

Okay, so far I’ve been singing VHYL’s praises like a devoted fan. But no investment is without risk or downsides, so let’s keep it real:

1. Fluctuating Dividends
   Dividends aren’t guaranteed. Companies can cut their payouts if profits or cash flow dwindle. A global recession could prompt multiple companies in the fund to scale back dividends, thereby reducing your income.
2. Currency Risk
   Since VHYL is global, you have exposure to various currencies (USD, EUR, JPY, etc.). If you’re based in the UK and the pound strengthens significantly against the dollar, the value of your US holdings could drop in pound terms, even if the stock prices in their local currency remain stable.
3. Market Volatility
   Just because these are large, stable companies doesn’t mean they’re immune to market swings. Economic downturns, wars, pandemics, or interest rate changes can hammer even the biggest stocks.
4. Opportunity Cost
   If you invest heavily in VHYL, that’s money you aren’t putting into, say, a high-growth tech fund or other opportunities that could offer higher returns (albeit with higher risk). Everyone’s risk tolerance and goals differ, so weigh your options carefully.

Still, in my view, these are standard risks you face with any equity investment. The difference is that VHYL’s global approach and diverse roster of established dividend payers tend to soften some of the blows.

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9. Why “A Little Bit Today” Keeps You Sane

One of the biggest draws to a high-dividend fund is the psychological cushion it provides. Markets go up and down, sometimes violently. If you’re relying solely on share price appreciation, a dip might fill you with dread. But if your portfolio is paying you solid dividends, you might be less inclined to panic-sell.

That’s exactly how I think about my properties. Even if the real estate market dips, I’m still collecting rental checks every month. So short-term fluctuations in property values don’t spook me as much. The same principle applies to VHYL: as long as the dividends keep flowing, you have time to let the market correct itself. Historically, long-term investors who hold steady through downturns often come out ahead.

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10. Exploring Other Options (And Why VHYL Stands Out)

Some might ask, “Couldn’t I just invest in the S&P 500, or maybe the FTSE 100, and get decent dividends too?” Sure, you could. But keep in mind:

• The S&P 500 is roughly 500 of the biggest US companies. That’s still somewhat regionally concentrated in the United States (though they operate globally).
• The FTSE 100 is the top 100 companies on the London Stock Exchange, and while some pay good dividends, you’re mostly centered on the UK market.
• There’s also Vanguard’s VHDY or other high-dividend funds, but they might not match VHYL’s global scope.

VHYL’s advantage is that it’s specifically screening for above-average dividend yields across the entire global spectrum. You get the benefit of multiple markets, not just the US or UK.

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11. Setting Realistic Expectations for “Making Millions”

I titled this post “The BEST Index Fund to Make MILLIONS – Vanguard VHYL ETF.” But let’s be realistic. You’re unlikely to become an overnight millionaire by investing in any single fund, including VHYL. However, if you’re:

1. Consistent
2. Patient
3. Willing to reinvest dividends (at least for a while)
4. Prepared to let compound interest do its magic

…then you really can build wealth that reaches seven figures and beyond, especially over multiple decades. The real secret ingredient is time. If you start early, regularly invest a substantial portion of your income, and let the dividends pile up (or supplement them into new investments), the snowball effect is incredible.

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12. Practical Steps to Get Started

If you’re sold on VHYL or at least curious enough to test the waters, here are some next steps:

1. Choose a Brokerage
   Look for a platform that suits your style, whether that’s Hargreaves Lansdown, Interactive Investor, Vanguard’s own platform, or another broker in your region. Consider fees, ease of use, and customer service.
2. Open an ISA Or LISA (If You’re in the UK)
   This is crucial for tax efficiency. The dividends you earn inside an ISA are tax-free, and any capital gains are also tax-free. If you’re not in the UK, look for your local equivalent (e.g., a Roth IRA in the US).
3. Decide on a Contribution Plan
   Are you going to invest a lump sum or dollar-cost average monthly? Both approaches have merit. If you have a big chunk of money sitting in your savings earning minimal interest, you might consider deploying it sooner rather than later.
4. Research and Monitor
   Even though VHYL is fairly hands-off, it’s good practice to keep an eye on it a few times a year. Read updates from Vanguard, check the dividend payout schedule, and make sure the strategy still aligns with your goals.
5. Stay Disciplined
   The worst time to sell is often during a market panic. Stick to your long-term plan unless there’s a genuinely good reason to pivot.

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13. Building Confidence Through Community

You might be reading this and thinking, “This all sounds great, but I’m still a bit nervous.” That’s totally normal. One thing that helped me was engaging with like-minded people—through online forums, investment groups, or even a local meetup. You can learn from others’ experiences, successes, and mistakes. And if you subscribe to my YouTube channel (shameless plug, I know!), we have a community-based approach where I share insights about my own investing journey, including our subscriber dividend portfolio.

The more you immerse yourself in the investment world, the more comfortable you’ll feel making decisions that suit your own financial situation and risk tolerance. We’re all learning, every single day.

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14. Handling the Highs and Lows

There’s an old investing adage: “Time in the market beats timing the market.” That means even if you bought a great fund at what seemed like a high price and it dips in the short term, if you hold for the long haul, you’ll likely come out on top—especially with a fund as diversified as VHYL. The hardest part is resisting the itch to jump in and out whenever the headlines get dramatic.

• Market High? Enjoy the gains on paper, but keep contributing if you can.
• Market Low? Look at it as a sale on shares and buy more. Your dividends might even get you more shares reinvested cheaply.

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15. My Final Thoughts on VHYL

After years in property and business, I’ve come to appreciate anything that simplifies my life while still providing solid returns. Vanguard’s VHYL does exactly that. Here’s the quick recap:

• It pays a consistent 3.5% dividend yield, which is lovely for income or reinvestment.
• Over 10 years, it’s shown around 80% growth, meaning your nest egg could potentially double while you collect dividend checks.
• It’s globally diversified, so you’re not betting on a single country or sector.
• Low fees (0.29%) keep more of your returns in your pocket.
• It fits my philosophy of having a “little bit for now” (dividends) and a “little bit for later” (capital appreciation).

Yes, there are risks, no question. All investments carry them. But if you want a “set it and mostly forget it” approach, with strong companies from around the world paying you dividends, you’d be hard-pressed to find a better all-in-one high-dividend fund than VHYL.

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16. Join the Conversation

I’m always eager to hear what other people are investing in. Maybe you’ve found an ETF or index fund you believe trumps VHYL. I encourage you to drop a comment below (or on my YouTube channel) if there’s something you’d love me to look into. That’s how we all learn and discover new opportunities.

By sharing each other’s ideas, we can collectively refine our investment strategies and, hopefully, help each other grow our wealth in a more stable, diversified way. I’m a huge fan of building a community around dividends and passive income, so if you have a hidden gem, don’t keep it to yourself!

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17. Putting It All Into Action

At this point, you might be thinking: “Okay, I get it—VHYL is great. Now what?” I’d suggest taking these action steps:

1. Assess Your Current Portfolio
   Ask yourself: do I have enough geographic and sector diversification? Am I too heavy in one region or sector? Could VHYL fill a gap?
2. Crunch Some Numbers
   What if you invested an extra £500 a month into VHYL for the next decade? Use a compound interest calculator to see how quickly those dividends could accelerate your account balance.
3. Set a Plan
   Write down a simple plan: “I will allocate X% of my monthly income into VHYL until it reaches Y amount. Then, I’ll re-evaluate.”
4. Automate, Automate, Automate
   Automating your monthly investments ensures that you stick to the plan without letting emotions or forgetting get in the way.
5. Celebrate Small Wins
   Each time you get your dividend payout, recognize that as your money working for you—no additional labor on your part. That positive reinforcement might keep you investing steadily rather than chasing the next big speculative stock.

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18. Conclusion: Why VHYL Is Worth a Serious Look

In the world of investing, there are always new fads and fancy funds claiming to be “the best.” I can’t promise VHYL will remain the top dividend-yielding ETF forever, but it’s certainly among the most reliable, globally diversified, and competitively priced. If you’re seeking:

• A reasonable dividend yield to pay you in the short term
• A track record of steady long-term growth
• A way to diversify across multiple sectors and geographic regions
• A low management fee so your returns remain yours

…then Vanguard’s All-World High Dividend Yield ETF might just be the perfect building block for a wealth-generating portfolio.

It fits my personal philosophy to a “T”: invest consistently in broad-based, dividend-paying assets so that I’m rewarded in both the short and the long term. And that, my friends, is how you grow a goose that lays golden eggs—without feeling tempted to sell the goose at the first sign of a market wobble.

If you’ve made it this far, thank you for reading! I hope you’ve found some inspiration and clarity about why I’m such a big fan of VHYL and why I believe it can be a valuable foundation for making millions over the course of a diligent, long-term investing journey.

Here’s to your future dividends—and the financial freedom they can bring.

Cheers,
Mark