FAD vs VYM
First Trust Multi Cap Growth AlphaDEX Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. FAD delivered stronger 1-year returns. FAD offers more diversification with 677 holdings.
Side-by-Side Comparison
| Metric | FAD | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.63% | 0.04% | |
| AUM | $608M | $81.6B | |
| Dividend Yield | 0.10% | 2.24% | |
| Holdings | 677 | 616 | |
| YTD Return | +18.43% | +15.84% | |
| 1Y Return | +27.11% | +23.95% | |
| 3Y Return (annualized) | +24.34% | +19.02% | |
| 5Y Return (annualized) | +10.70% | +12.19% | |
| Volatility (annualized) | 18.7% | 14.6% | |
| Max Drawdown | -54.5% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 8, 2007 | Nov 10, 2006 |
FAD vs VYM Performance
First Trust Multi Cap Growth AlphaDEX Fund (FAD) is a ETF from First Trust Portfolios (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year FAD returned +27.11% while VYM returned +23.95%. Year to date, FAD is up 18.43% versus a gain of 15.84% for VYM.
Over three years, FAD compounded at +24.34% per year against +19.02% for VYM; over five years the annualized figures are +10.70% and +12.19% respectively. Across the full 19-year window we track, FAD has the edge at +10.31% annualized vs +7.07%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FAD has been the more volatile fund, with annualized monthly volatility of 18.7% 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 -54.5% for FAD 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FAD charges 0.63% per year while VYM charges 0.04%. On a $10,000 position that is $63 vs $4 annually, a gap of $59 per year that compounds over a long holding period. On income, FAD currently yields 0.10% against 2.24% for VYM.
Holdings Overlap
FAD and VYM share 96 holdings out of 1170 unique holdings combined, representing a 11.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FAD or VYM?
FAD has an expense ratio of 0.63% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $59 per year of difference.
Which performed better, FAD or VYM?
Over the past year FAD returned +27.11% vs +23.95% for VYM, so FAD leads on 1-year performance. Over the longest common window we track (19 years), FAD annualized +10.31% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, FAD or VYM?
FAD has been the more volatile fund at 18.7% annualized versus 14.6% for VYM. Worst drawdown: FAD -54.5% vs VYM -58.8%.
Should I hold both FAD and VYM?
FAD and VYM have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAD and VYM?
FAD and VYM share 96 common holdings with a 11.1% weight overlap. Combined, they hold 1170 unique securities.
Which pays a higher dividend, FAD or VYM?
FAD yields 0.10% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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