FMHI vs VYM
First Trust Municipal High Income ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. FMHI offers more diversification with 736 holdings.
Side-by-Side Comparison
| Metric | FMHI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.04% | |
| AUM | $1.0B | $81.6B | |
| Dividend Yield | 4.35% | 2.24% | |
| Holdings | 736 | 616 | |
| YTD Return | +1.31% | +15.34% | |
| 1Y Return | +6.78% | +23.24% | |
| 3Y Return (annualized) | +4.87% | +19.22% | |
| 5Y Return (annualized) | +0.23% | +12.21% | |
| Volatility (annualized) | 7.2% | 14.6% | |
| Max Drawdown | -18.8% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 2, 2017 | Nov 10, 2006 |
FMHI vs VYM Performance
First Trust Municipal High Income ETF (FMHI) 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 FMHI returned +6.78% while VYM returned +23.24%. Year to date, FMHI is up 1.31% versus a gain of 15.34% for VYM.
Over three years, FMHI compounded at +4.87% per year against +19.22% for VYM; over five years the annualized figures are +0.23% and +12.21% respectively. Across the full 9-year window we track, VYM has the edge at +7.04% annualized vs +1.71%. 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 7.2% for FMHI. 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 -18.8% for FMHI 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 0.44. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FMHI charges 0.49% per year while VYM charges 0.04%. On a $10,000 position that is $49 vs $4 annually, a gap of $45 per year that compounds over a long holding period. On income, FMHI currently yields 4.35% against 2.24% for VYM.
Holdings Overlap
FMHI and VYM share 0 holdings out of 1091 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, FMHI or VYM?
FMHI has an expense ratio of 0.49% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $45 per year of difference.
Which performed better, FMHI or VYM?
Over the past year FMHI returned +6.78% vs +23.24% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (9 years), FMHI annualized +1.71% vs +7.04% for VYM. Past performance does not guarantee future results.
Which is riskier, FMHI or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 7.2% for FMHI. Worst drawdown: FMHI -18.8% vs VYM -58.8%.
Should I hold both FMHI and VYM?
FMHI and VYM have a monthly-return correlation of 0.44, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FMHI and VYM?
FMHI and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1091 unique securities.
Which pays a higher dividend, FMHI or VYM?
FMHI yields 4.35% while VYM yields 2.24%, so FMHI currently pays the higher dividend yield.
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