FXZ vs VYM
First Trust Materials AlphaDEX Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. FXZ delivered stronger 1-year returns. VYM offers more diversification with 616 holdings.
Side-by-Side Comparison
| Metric | FXZ | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.64% | 0.04% | |
| AUM | $390M | $81.6B | |
| Dividend Yield | 1.42% | 2.24% | |
| Holdings | 40 | 616 | |
| YTD Return | +26.85% | +16.42% | |
| 1Y Return | +42.97% | +24.22% | |
| 3Y Return (annualized) | +10.56% | +19.03% | |
| 5Y Return (annualized) | +9.07% | +12.21% | |
| Volatility (annualized) | 24.6% | 14.6% | |
| Max Drawdown | -66.0% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 8, 2007 | Nov 10, 2006 |
FXZ vs VYM Performance
First Trust Materials AlphaDEX Fund (FXZ) 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 FXZ returned +42.97% while VYM returned +24.22%. Year to date, FXZ is up 26.85% versus a gain of 16.42% for VYM.
Over three years, FXZ compounded at +10.56% per year against +19.03% for VYM; over five years the annualized figures are +9.07% and +12.21% respectively. Across the full 19-year window we track, FXZ has the edge at +8.25% annualized vs +7.10%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FXZ has been the more volatile fund, with annualized monthly volatility of 24.6% 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 -66.0% for FXZ 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 0.83. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FXZ charges 0.64% per year while VYM charges 0.04%. On a $10,000 position that is $64 vs $4 annually, a gap of $60 per year that compounds over a long holding period. On income, FXZ currently yields 1.42% against 2.24% for VYM.
Holdings Overlap
FXZ and VYM share 21 holdings out of 621 unique holdings combined, representing a 2.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FXZ or VYM?
FXZ has an expense ratio of 0.64% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $60 per year of difference.
Which performed better, FXZ or VYM?
Over the past year FXZ returned +42.97% vs +24.22% for VYM, so FXZ leads on 1-year performance. Over the longest common window we track (19 years), FXZ annualized +8.25% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, FXZ or VYM?
FXZ has been the more volatile fund at 24.6% annualized versus 14.6% for VYM. Worst drawdown: FXZ -66.0% vs VYM -58.8%.
Should I hold both FXZ and VYM?
FXZ and VYM have a monthly-return correlation of 0.83, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FXZ and VYM?
FXZ and VYM share 21 common holdings with a 2.8% weight overlap. Combined, they hold 621 unique securities.
Which pays a higher dividend, FXZ or VYM?
FXZ yields 1.42% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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