HFRO vs VTI
Highland Opportunities and Income Fund vs Vanguard Total Stock Market ETF
Quick Verdict
VTI has a lower expense ratio. HFRO delivered stronger 1-year returns. VTI offers more diversification with 2783 holdings.
Side-by-Side Comparison
| Metric | HFRO | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 1.18% | 0.03% | |
| AUM | $650M | $663.5B | |
| Dividend Yield | 3.91% | 1.07% | |
| Holdings | 64 | 3,543 | |
| YTD Return | +24.77% | +14.22% | |
| 1Y Return | +28.68% | +22.19% | |
| 3Y Return (annualized) | +3.23% | +21.27% | |
| 5Y Return (annualized) | +0.57% | +12.23% | |
| Volatility (annualized) | 25.0% | 15.3% | |
| Max Drawdown | -60.5% | -56.6% | |
| Fund Family | NexPoint | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jan 13, 2000 | May 24, 2001 |
HFRO vs VTI Performance
Highland Opportunities and Income Fund (HFRO) is a ETF from NexPoint and Vanguard Total Stock Market ETF (VTI) is a ETF from Vanguard (US). Over the past year HFRO returned +28.68% while VTI returned +22.19%. Year to date, HFRO is up 24.77% versus a gain of 14.22% for VTI.
Over three years, HFRO compounded at +3.23% per year against +21.27% for VTI; over five years the annualized figures are +0.57% and +12.23% respectively. Across the full 9-year window we track, VTI has the edge at +8.14% annualized vs -3.40%. 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 15.3% for VTI. 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 -56.6% for VTI. 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 0.53. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HFRO charges 1.18% per year while VTI 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 1.07% for VTI.
Holdings Overlap
HFRO and VTI share 4 holdings out of 2793 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 VTI?
HFRO has an expense ratio of 1.18% while VTI charges 0.03%. VTI is the cheaper option. On a $10,000 investment, that is $115 per year of difference.
Which performed better, HFRO or VTI?
Over the past year HFRO returned +28.68% vs +22.19% for VTI, so HFRO leads on 1-year performance. Over the longest common window we track (9 years), HFRO annualized -3.40% vs +8.14% for VTI. Past performance does not guarantee future results.
Which is riskier, HFRO or VTI?
HFRO has been the more volatile fund at 25.0% annualized versus 15.3% for VTI. Worst drawdown: HFRO -60.5% vs VTI -56.6%.
Should I hold both HFRO and VTI?
HFRO and VTI have a monthly-return correlation of 0.53, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HFRO and VTI?
HFRO and VTI share 4 common holdings with a 0.0% weight overlap. Combined, they hold 2793 unique securities.
Which pays a higher dividend, HFRO or VTI?
HFRO yields 3.91% while VTI yields 1.07%, so HFRO currently pays the higher dividend yield.
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