The Vanguard High Dividend Yield ETF (VYM 0.26%) has proven a profitable investment over the years. If you had invested $300 into the ETF five years ago, you'd have around $466 today -- a 55.6% return. But before you jump in, there are three things you should know about this fund.

3 things to know about Vanguard's High Dividend Yield ETF

One of the biggest determinants of a fund's performance is its expense ratio. That's how much a company charges you per year for holding the ETF. The Vanguard High Dividend Yield ETF has an expense ratio of just 0.06%. Vanguard estimates the expense ratio of similar funds to be around 0.9%, so this ETF is quite a bargain when it comes to expenses.

Vanguard's High Dividend Yield ETF also demonstrates less volatility than many market indices. Its beta versus the Dow Jones U.S. Total Stock Market Index, for instance, is just 0.74. That means that if the stock market were to fall by 1%, this ETF would be expected to fall by just 0.74%.

Beta works both ways, however. And that brings us to the final thing to know about Vanguard's High Dividend Yield ETF: it typically underperforms major market indices during a bull market. While this ETF rose in value by 55.6% over the last five years, the S&P 500 rose 86.6% in value over the same time period. That's quite a difference.

In summary, the Vanguard High Dividend Yield ETF is a great option for more income-oriented investors looking for a cost-effective way to invest in high yield, low volatility stocks. But if you're looking for maximum upside, a simple S&P 500 index fund is likely the superior choice.