FIW vs VYM
First Trust Water 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 558 holdings.
Side-by-Side Comparison
| Metric | FIW | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.51% | 0.04% | |
| AUM | $1.8B | $79.0B | |
| Dividend Yield | 0.79% | 2.86% | |
| Holdings | 37 | 568 | |
| YTD Return | +3.72% | +16.16% | |
| 1Y Return | +2.75% | +26.05% | |
| 3Y Return (annualized) | +8.83% | +18.43% | |
| 5Y Return (annualized) | +5.64% | +12.21% | |
| Volatility (annualized) | 18.8% | 14.6% | |
| Max Drawdown | -53.1% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 8, 2007 | Nov 10, 2006 |
FIW vs VYM Performance
First Trust Water ETF (FIW) 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 FIW returned +2.75% while VYM returned +26.05%. Year to date, FIW is up 3.72% versus a gain of 16.16% for VYM.
Over three years, FIW compounded at +8.83% per year against +18.43% for VYM; over five years the annualized figures are +5.64% and +12.21% respectively. Across the full 19-year window we track, FIW has the edge at +9.57% annualized vs +7.09%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FIW has been the more volatile fund, with annualized monthly volatility of 18.8% 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 -53.1% for FIW 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 0.82. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FIW charges 0.51% per year while VYM charges 0.04%. On a $10,000 position that is $51 vs $4 annually, a gap of $47 per year that compounds over a long holding period. On income, FIW currently yields 0.79% against 2.86% for VYM.
Holdings Overlap
FIW and VYM share 7 holdings out of 587 unique holdings combined, representing a 0.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FIW or VYM?
FIW has an expense ratio of 0.51% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $47 per year of difference.
Which performed better, FIW or VYM?
Over the past year FIW returned +2.75% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (19 years), FIW annualized +9.57% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, FIW or VYM?
FIW has been the more volatile fund at 18.8% annualized versus 14.6% for VYM. Worst drawdown: FIW -53.1% vs VYM -58.8%.
Should I hold both FIW and VYM?
FIW and VYM have a monthly-return correlation of 0.82, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FIW and VYM?
FIW and VYM share 7 common holdings with a 0.5% weight overlap. Combined, they hold 587 unique securities.
Which pays a higher dividend, FIW or VYM?
FIW yields 0.79% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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