FESM vs VYM
Fidelity Enhanced Small Cap Core ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. FESM delivered stronger 1-year returns. FESM offers more diversification with 583 holdings.
Side-by-Side Comparison
| Metric | FESM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.04% | |
| AUM | $5.8B | $79.0B | |
| Dividend Yield | 0.71% | 2.86% | |
| Holdings | 625 | 568 | |
| YTD Return | +27.58% | +15.80% | |
| 1Y Return | +47.36% | +26.12% | |
| 3Y Return (annualized) | - | +18.25% | |
| 5Y Return (annualized) | - | +12.51% | |
| Volatility (annualized) | 19.8% | 14.6% | |
| Max Drawdown | -26.9% | -58.8% | |
| Fund Family | Fidelity Investments (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Nov 20, 2023 | Nov 10, 2006 |
FESM vs VYM Performance
Fidelity Enhanced Small Cap Core ETF (FESM) is a ETF from Fidelity Investments (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year FESM returned +47.36% while VYM returned +26.12%. Year to date, FESM is up 27.58% versus a gain of 15.80% for VYM.
Risk: Volatility and Drawdowns
FESM has been the more volatile fund, with annualized monthly volatility of 19.8% 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 -26.9% for FESM 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 0.81. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FESM charges 0.28% per year while VYM charges 0.04%. On a $10,000 position that is $28 vs $4 annually, a gap of $24 per year that compounds over a long holding period. On income, FESM currently yields 0.71% against 2.86% for VYM.
Holdings Overlap
FESM and VYM share 80 holdings out of 1061 unique holdings combined, representing a 1.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FESM or VYM?
FESM has an expense ratio of 0.28% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $24 per year of difference.
Which performed better, FESM or VYM?
Over the past year FESM returned +47.36% vs +26.12% for VYM, so FESM leads on 1-year performance. Over the longest common window we track (3 years), FESM annualized +28.52% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, FESM or VYM?
FESM has been the more volatile fund at 19.8% annualized versus 14.6% for VYM. Worst drawdown: FESM -26.9% vs VYM -58.8%.
Should I hold both FESM and VYM?
FESM and VYM have a monthly-return correlation of 0.81, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FESM and VYM?
FESM and VYM share 80 common holdings with a 1.2% weight overlap. Combined, they hold 1061 unique securities.
Which pays a higher dividend, FESM or VYM?
FESM yields 0.71% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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