FMB vs VYM
First Trust Managed Municipal ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. FMB offers more diversification with 1,279 holdings.
Side-by-Side Comparison
| Metric | FMB | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.04% | |
| AUM | $2.1B | $81.6B | |
| Dividend Yield | 3.62% | 2.24% | |
| Holdings | 1,279 | 616 | |
| YTD Return | +1.02% | +16.42% | |
| 1Y Return | +5.03% | +24.22% | |
| 3Y Return (annualized) | +3.44% | +19.03% | |
| 5Y Return (annualized) | +0.41% | +12.21% | |
| Volatility (annualized) | 4.9% | 14.6% | |
| Max Drawdown | -14.2% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | May 13, 2014 | Nov 10, 2006 |
FMB vs VYM Performance
First Trust Managed Municipal ETF (FMB) 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 FMB returned +5.03% while VYM returned +24.22%. Year to date, FMB is up 1.02% versus a gain of 16.42% for VYM.
Over three years, FMB compounded at +3.44% per year against +19.03% for VYM; over five years the annualized figures are +0.41% and +12.21% respectively. Across the full 12-year window we track, VYM has the edge at +7.10% annualized vs +1.37%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 4.9% for FMB. 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 -14.2% for FMB 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 0.33. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FMB charges 0.39% per year while VYM charges 0.04%. On a $10,000 position that is $39 vs $4 annually, a gap of $35 per year that compounds over a long holding period. On income, FMB currently yields 3.62% against 2.24% for VYM.
Holdings Overlap
FMB and VYM share 0 holdings out of 1239 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, FMB or VYM?
FMB has an expense ratio of 0.39% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $35 per year of difference.
Which performed better, FMB or VYM?
Over the past year FMB returned +5.03% vs +24.22% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (12 years), FMB annualized +1.37% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, FMB or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 4.9% for FMB. Worst drawdown: FMB -14.2% vs VYM -58.8%.
Should I hold both FMB and VYM?
FMB and VYM have a monthly-return correlation of 0.33, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FMB and VYM?
FMB and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1239 unique securities.
Which pays a higher dividend, FMB or VYM?
FMB yields 3.62% while VYM yields 2.24%, so FMB currently pays the higher dividend yield.
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