FDL vs VYM
First Trust Morningstar Dividend Leaders Index Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. FDL delivered stronger 1-year returns. VYM offers more diversification with 616 holdings.
Side-by-Side Comparison
| Metric | FDL | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.43% | 0.04% | |
| AUM | $8.0B | $81.6B | |
| Dividend Yield | 3.59% | 2.24% | |
| Holdings | 101 | 616 | |
| YTD Return | +20.26% | +16.42% | |
| 1Y Return | +26.63% | +24.22% | |
| 3Y Return (annualized) | +20.32% | +19.03% | |
| 5Y Return (annualized) | +13.63% | +12.21% | |
| Volatility (annualized) | 16.1% | 14.6% | |
| Max Drawdown | -68.6% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 9, 2006 | Nov 10, 2006 |
FDL vs VYM Performance
First Trust Morningstar Dividend Leaders Index Fund (FDL) 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 FDL returned +26.63% while VYM returned +24.22%. Year to date, FDL is up 20.26% versus a gain of 16.42% for VYM.
Over three years, FDL compounded at +20.32% per year against +19.03% for VYM; over five years the annualized figures are +13.63% and +12.21% respectively. Across the full 20-year window we track, VYM has the edge at +7.10% annualized vs +5.93%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FDL has been the more volatile fund, with annualized monthly volatility of 16.1% 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 -68.6% for FDL 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 0.91. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
FDL charges 0.43% per year while VYM charges 0.04%. On a $10,000 position that is $43 vs $4 annually, a gap of $39 per year that compounds over a long holding period. On income, FDL currently yields 3.59% against 2.24% for VYM.
Holdings Overlap
FDL and VYM share 96 holdings out of 607 unique holdings combined, representing a 14.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FDL or VYM?
FDL has an expense ratio of 0.43% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $39 per year of difference.
Which performed better, FDL or VYM?
Over the past year FDL returned +26.63% vs +24.22% for VYM, so FDL leads on 1-year performance. Over the longest common window we track (20 years), FDL annualized +5.93% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, FDL or VYM?
FDL has been the more volatile fund at 16.1% annualized versus 14.6% for VYM. Worst drawdown: FDL -68.6% vs VYM -58.8%.
Should I hold both FDL and VYM?
FDL and VYM have a monthly-return correlation of 0.91, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between FDL and VYM?
FDL and VYM share 96 common holdings with a 14.3% weight overlap. Combined, they hold 607 unique securities.
Which pays a higher dividend, FDL or VYM?
FDL yields 3.59% while VYM yields 2.24%, so FDL currently pays the higher dividend yield.
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