DFEM vs VYM
Dimensional Emerging Markets Core Equity 2 ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. DFEM delivered stronger 1-year returns. DFEM offers more diversification with 6316 holdings.
Side-by-Side Comparison
| Metric | DFEM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.04% | |
| AUM | $8.9B | $79.0B | |
| Dividend Yield | 1.85% | 2.86% | |
| Holdings | 6,512 | 568 | |
| YTD Return | +16.85% | +15.80% | |
| 1Y Return | +31.38% | +26.12% | |
| 3Y Return (annualized) | +20.23% | +18.25% | |
| 5Y Return (annualized) | - | +12.51% | |
| Volatility (annualized) | 17.4% | 14.6% | |
| Max Drawdown | -20.8% | -58.8% | |
| Fund Family | Dimensional | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Apr 26, 2022 | Nov 10, 2006 |
DFEM vs VYM Performance
Dimensional Emerging Markets Core Equity 2 ETF (DFEM) is a ETF from Dimensional and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year DFEM returned +31.38% while VYM returned +26.12%. Year to date, DFEM is up 16.85% versus a gain of 15.80% for VYM.
Over three years, DFEM compounded at +20.23% per year against +18.25% for VYM. Across the full 4-year window we track, DFEM has the edge at +13.68% annualized vs +7.07%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
DFEM has been the more volatile fund, with annualized monthly volatility of 17.4% compared with 14.6% for VYM. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -20.8% for DFEM and -58.8% for VYM. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFEM charges 0.39% per year while VYM charges 0.04%. On a $10,000 position that is $39 vs $4 annually, a gap of $35 per year that compounds over a long holding period. On income, DFEM currently yields 1.85% against 2.86% for VYM.
Holdings Overlap
DFEM and VYM share 3 holdings out of 6871 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, DFEM or VYM?
DFEM has an expense ratio of 0.39% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $35 per year of difference.
Which performed better, DFEM or VYM?
Over the past year DFEM returned +31.38% vs +26.12% for VYM, so DFEM leads on 1-year performance. Over the longest common window we track (4 years), DFEM annualized +13.68% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, DFEM or VYM?
DFEM has been the more volatile fund at 17.4% annualized versus 14.6% for VYM. Worst drawdown: DFEM -20.8% vs VYM -58.8%.
Should I hold both DFEM and VYM?
DFEM and VYM have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFEM and VYM?
DFEM and VYM share 3 common holdings with a 0.2% weight overlap. Combined, they hold 6871 unique securities.
Which pays a higher dividend, DFEM or VYM?
DFEM yields 1.85% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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