FEM vs VYM
First Trust Emerging Markets AlphaDEX Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. FEM delivered stronger 1-year returns. VYM offers more diversification with 616 holdings.
Side-by-Side Comparison
| Metric | FEM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.80% | 0.04% | |
| AUM | $788M | $81.6B | |
| Dividend Yield | 2.33% | 2.24% | |
| Holdings | 173 | 616 | |
| YTD Return | +18.05% | +15.60% | |
| 1Y Return | +28.88% | +23.48% | |
| 3Y Return (annualized) | +19.20% | +19.07% | |
| 5Y Return (annualized) | +9.04% | +12.50% | |
| Volatility (annualized) | 19.7% | 14.6% | |
| Max Drawdown | -49.8% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Apr 18, 2011 | Nov 10, 2006 |
FEM vs VYM Performance
First Trust Emerging Markets AlphaDEX Fund (FEM) 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 FEM returned +28.88% while VYM returned +23.48%. Year to date, FEM is up 18.05% versus a gain of 15.60% for VYM.
Over three years, FEM compounded at +19.20% per year against +19.07% for VYM; over five years the annualized figures are +9.04% and +12.50% respectively. Across the full 15-year window we track, VYM has the edge at +7.05% annualized vs +2.21%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FEM has been the more volatile fund, with annualized monthly volatility of 19.7% 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 -49.8% for FEM 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 0.68. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FEM charges 0.80% per year while VYM charges 0.04%. On a $10,000 position that is $80 vs $4 annually, a gap of $76 per year that compounds over a long holding period. On income, FEM currently yields 2.33% against 2.24% for VYM.
Holdings Overlap
FEM and VYM share 1 holdings out of 756 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in FEM | Weight in VYM | Difference |
|---|---|---|---|
| BAP | 0.24% | 0.11% | 0.13% |
Frequently Asked Questions
Which is cheaper, FEM or VYM?
FEM has an expense ratio of 0.80% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $76 per year of difference.
Which performed better, FEM or VYM?
Over the past year FEM returned +28.88% vs +23.48% for VYM, so FEM leads on 1-year performance. Over the longest common window we track (15 years), FEM annualized +2.21% vs +7.05% for VYM. Past performance does not guarantee future results.
Which is riskier, FEM or VYM?
FEM has been the more volatile fund at 19.7% annualized versus 14.6% for VYM. Worst drawdown: FEM -49.8% vs VYM -58.8%.
Should I hold both FEM and VYM?
FEM and VYM have a monthly-return correlation of 0.68, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEM and VYM?
FEM and VYM share 1 common holdings with a 0.1% weight overlap. Combined, they hold 756 unique securities.
Which pays a higher dividend, FEM or VYM?
FEM yields 2.33% while VYM yields 2.24%, so FEM currently pays the higher dividend yield.
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