FCT vs VYM
First Trust Senior Floating Rate Income Fund II 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 616 holdings.
Side-by-Side Comparison
| Metric | FCT | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 1.67% | 0.04% | |
| AUM | $252M | $81.6B | |
| Dividend Yield | 11.84% | 2.24% | |
| Holdings | 221 | 616 | |
| YTD Return | +2.69% | +16.42% | |
| 1Y Return | +7.32% | +24.22% | |
| 3Y Return (annualized) | +10.56% | +19.03% | |
| 5Y Return (annualized) | +5.74% | +12.21% | |
| Volatility (annualized) | 14.8% | 14.6% | |
| Max Drawdown | -72.7% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | May 25, 2004 | Nov 10, 2006 |
FCT vs VYM Performance
First Trust Senior Floating Rate Income Fund II (FCT) 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 FCT returned +7.32% while VYM returned +24.22%. Year to date, FCT is up 2.69% versus a gain of 16.42% for VYM.
Over three years, FCT compounded at +10.56% per year against +19.03% for VYM; over five years the annualized figures are +5.74% and +12.21% respectively. Across the full 20-year window we track, VYM has the edge at +7.10% annualized vs -0.76%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FCT has been the more volatile fund, with annualized monthly volatility of 14.8% 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 -72.7% for FCT 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 0.53. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FCT charges 1.67% per year while VYM charges 0.04%. On a $10,000 position that is $167 vs $4 annually, a gap of $163 per year that compounds over a long holding period. On income, FCT currently yields 11.84% against 2.24% for VYM.
Holdings Overlap
FCT and VYM share 0 holdings out of 709 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, FCT or VYM?
FCT has an expense ratio of 1.67% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $163 per year of difference.
Which performed better, FCT or VYM?
Over the past year FCT returned +7.32% vs +24.22% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), FCT annualized -0.76% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, FCT or VYM?
FCT has been the more volatile fund at 14.8% annualized versus 14.6% for VYM. Worst drawdown: FCT -72.7% vs VYM -58.8%.
Should I hold both FCT and VYM?
FCT and VYM have a monthly-return correlation of 0.53, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FCT and VYM?
FCT and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 709 unique securities.
Which pays a higher dividend, FCT or VYM?
FCT yields 11.84% while VYM yields 2.24%, so FCT currently pays the higher dividend yield.
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