DFNM vs VYM
Dimensional National Municipal Bond ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. DFNM offers more diversification with 1,094 holdings.
Side-by-Side Comparison
| Metric | DFNM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.17% | 0.04% | |
| AUM | $2.3B | $81.6B | |
| Dividend Yield | 2.98% | 2.24% | |
| Holdings | 1,094 | 616 | |
| YTD Return | +0.37% | +14.66% | |
| 1Y Return | +3.38% | +22.16% | |
| 3Y Return (annualized) | +3.06% | +18.72% | |
| 5Y Return (annualized) | - | +12.18% | |
| Volatility (annualized) | 4.1% | 14.6% | |
| Max Drawdown | -7.0% | -58.8% | |
| Fund Family | Dimensional | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 15, 2021 | Nov 10, 2006 |
DFNM vs VYM Performance
Dimensional National Municipal Bond ETF (DFNM) is a ETF from Dimensional and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year DFNM returned +3.38% while VYM returned +22.16%. Year to date, DFNM is up 0.37% versus a gain of 14.66% for VYM.
Over three years, DFNM compounded at +3.06% per year against +18.72% for VYM. Across the full 5-year window we track, VYM has the edge at +7.01% annualized vs +1.19%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 4.1% for DFNM. 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 -7.0% for DFNM 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 0.58. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFNM charges 0.17% per year while VYM charges 0.04%. On a $10,000 position that is $17 vs $4 annually, a gap of $13 per year that compounds over a long holding period. On income, DFNM currently yields 2.98% against 2.24% for VYM.
Holdings Overlap
DFNM and VYM share 0 holdings out of 777 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, DFNM or VYM?
DFNM has an expense ratio of 0.17% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $13 per year of difference.
Which performed better, DFNM or VYM?
Over the past year DFNM returned +3.38% vs +22.16% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (5 years), DFNM annualized +1.19% vs +7.01% for VYM. Past performance does not guarantee future results.
Which is riskier, DFNM or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 4.1% for DFNM. Worst drawdown: DFNM -7.0% vs VYM -58.8%.
Should I hold both DFNM and VYM?
DFNM and VYM have a monthly-return correlation of 0.58, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFNM and VYM?
DFNM and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 777 unique securities.
Which pays a higher dividend, DFNM or VYM?
DFNM yields 2.98% while VYM yields 2.24%, so DFNM currently pays the higher dividend yield.
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