HFRO vs VOO
Highland Opportunities and Income Fund vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. HFRO delivered stronger 1-year returns. VOO offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | HFRO | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 1.18% | 0.03% | |
| AUM | $650M | $979.0B | |
| Dividend Yield | 3.91% | 1.09% | |
| Holdings | 64 | 509 | |
| YTD Return | +26.15% | +13.44% | |
| 1Y Return | +30.54% | +22.62% | |
| 3Y Return (annualized) | +3.62% | +21.47% | |
| 5Y Return (annualized) | +0.75% | +13.27% | |
| Volatility (annualized) | 25.0% | 14.1% | |
| Max Drawdown | -60.5% | -34.3% | |
| Fund Family | NexPoint | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jan 13, 2000 | Sep 7, 2010 |
HFRO vs VOO Performance
Highland Opportunities and Income Fund (HFRO) is a ETF from NexPoint and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year HFRO returned +30.54% while VOO returned +22.62%. Year to date, HFRO is up 26.15% versus a gain of 13.44% for VOO.
Over three years, HFRO compounded at +3.62% per year against +21.47% for VOO; over five years the annualized figures are +0.75% and +13.27% respectively. Across the full 9-year window we track, VOO has the edge at +13.55% annualized vs -3.28%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
HFRO has been the more volatile fund, with annualized monthly volatility of 25.0% compared with 14.1% for VOO. 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 -60.5% for HFRO and -34.3% for VOO. 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 0.52. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HFRO charges 1.18% per year while VOO charges 0.03%. On a $10,000 position that is $118 vs $3 annually, a gap of $115 per year that compounds over a long holding period. On income, HFRO currently yields 3.91% against 1.09% for VOO.
Holdings Overlap
HFRO and VOO share 0 holdings out of 519 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, HFRO or VOO?
HFRO has an expense ratio of 1.18% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $115 per year of difference.
Which performed better, HFRO or VOO?
Over the past year HFRO returned +30.54% vs +22.62% for VOO, so HFRO leads on 1-year performance. Over the longest common window we track (9 years), HFRO annualized -3.28% vs +13.55% for VOO. Past performance does not guarantee future results.
Which is riskier, HFRO or VOO?
HFRO has been the more volatile fund at 25.0% annualized versus 14.1% for VOO. Worst drawdown: HFRO -60.5% vs VOO -34.3%.
Should I hold both HFRO and VOO?
HFRO and VOO have a monthly-return correlation of 0.52, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HFRO and VOO?
HFRO and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 519 unique securities.
Which pays a higher dividend, HFRO or VOO?
HFRO yields 3.91% while VOO yields 1.09%, so HFRO currently pays the higher dividend yield.
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