FALN vs VYM
iShares Fallen Angels USD Bond ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 568 holdings.
Side-by-Side Comparison
| Metric | FALN | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.25% | 0.04% | |
| AUM | $1.6B | $79.0B | |
| Dividend Yield | 6.41% | 2.86% | |
| Holdings | 159 | 568 | |
| YTD Return | +2.49% | +16.78% | |
| 1Y Return | +5.79% | +24.43% | |
| 3Y Return (annualized) | +8.84% | +18.60% | |
| 5Y Return (annualized) | +3.58% | +12.30% | |
| Volatility (annualized) | 9.4% | 14.6% | |
| Max Drawdown | -30.0% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jun 14, 2016 | Nov 10, 2006 |
FALN vs VYM Performance
iShares Fallen Angels USD Bond ETF (FALN) 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 FALN returned +5.79% while VYM returned +24.43%. Year to date, FALN is up 2.49% versus a gain of 16.78% for VYM.
Over three years, FALN compounded at +8.84% per year against +18.60% for VYM; over five years the annualized figures are +3.58% and +12.30% respectively. Across the full 10-year window we track, VYM has the edge at +7.11% annualized vs +3.71%. 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 9.4% for FALN. 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 -30.0% for FALN 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 0.74. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FALN charges 0.25% per year while VYM charges 0.04%. On a $10,000 position that is $25 vs $4 annually, a gap of $21 per year that compounds over a long holding period. On income, FALN currently yields 6.41% against 2.86% for VYM.
Holdings Overlap
FALN and VYM share 0 holdings out of 716 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, FALN or VYM?
FALN has an expense ratio of 0.25% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $21 per year of difference.
Which performed better, FALN or VYM?
Over the past year FALN returned +5.79% vs +24.43% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (10 years), FALN annualized +3.71% vs +7.11% for VYM. Past performance does not guarantee future results.
Which is riskier, FALN or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 9.4% for FALN. Worst drawdown: FALN -30.0% vs VYM -58.8%.
Should I hold both FALN and VYM?
FALN and VYM have a monthly-return correlation of 0.74, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FALN and VYM?
FALN and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 716 unique securities.
Which pays a higher dividend, FALN or VYM?
FALN yields 6.41% while VYM yields 2.86%, so FALN currently pays the higher dividend yield.
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