EEM vs VYM
iShares MSCI Emerging Markets ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. EEM delivered stronger 1-year returns. EEM offers more diversification with 1109 holdings.
Side-by-Side Comparison
| Metric | EEM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.72% | 0.04% | |
| AUM | $28.6B | $79.0B | |
| Dividend Yield | 1.63% | 2.86% | |
| Holdings | 1,224 | 568 | |
| YTD Return | +17.32% | +15.80% | |
| 1Y Return | +35.26% | +26.12% | |
| 3Y Return (annualized) | +20.82% | +18.25% | |
| 5Y Return (annualized) | +7.23% | +12.51% | |
| Volatility (annualized) | 20.8% | 14.6% | |
| Max Drawdown | -68.8% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Apr 7, 2003 | Nov 10, 2006 |
EEM vs VYM Performance
iShares MSCI Emerging Markets ETF (EEM) is a ETF from iShares by BlackRock (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year EEM returned +35.26% while VYM returned +26.12%. Year to date, EEM is up 17.32% versus a gain of 15.80% for VYM.
Over three years, EEM compounded at +20.82% per year against +18.25% for VYM; over five years the annualized figures are +7.23% and +12.51% respectively. Across the full 20-year window we track, EEM has the edge at +8.49% annualized vs +7.07%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
EEM has been the more volatile fund, with annualized monthly volatility of 20.8% 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 -68.8% for EEM 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 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
EEM charges 0.72% per year while VYM charges 0.04%. On a $10,000 position that is $72 vs $4 annually, a gap of $68 per year that compounds over a long holding period. On income, EEM currently yields 1.63% against 2.86% for VYM.
Holdings Overlap
EEM and VYM share 5 holdings out of 1662 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, EEM or VYM?
EEM has an expense ratio of 0.72% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $68 per year of difference.
Which performed better, EEM or VYM?
Over the past year EEM returned +35.26% vs +26.12% for VYM, so EEM leads on 1-year performance. Over the longest common window we track (20 years), EEM annualized +8.49% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, EEM or VYM?
EEM has been the more volatile fund at 20.8% annualized versus 14.6% for VYM. Worst drawdown: EEM -68.8% vs VYM -58.8%.
Should I hold both EEM and VYM?
EEM and VYM have a monthly-return correlation of 0.70, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between EEM and VYM?
EEM and VYM share 5 common holdings with a 0.3% weight overlap. Combined, they hold 1662 unique securities.
Which pays a higher dividend, EEM or VYM?
EEM yields 1.63% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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