HFRO vs VYM
Highland Opportunities and Income Fund vs Vanguard High Dividend Yield ETF
Which is better, HFRO or VYM?
Bank Loan against Large Cap Value.
VYM has a lower expense ratio. HFRO led over 1Y, VYM over 3Y, 5Y and the full window.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | HFRO | VYM |
|---|---|---|
| Expense Ratio | 1.18% | 0.04%Best |
| AUM | $644M | $81.6B |
| Dividend Yield | 3.92% | 2.24% |
| Holdings | 63 | 613 |
| YTD Return | +29.29%Best | +14.82% |
| 1Y Return | +29.06%Best | +20.84% |
| 3Y Return (annualized) | +4.68% | +18.64%Best |
| 5Y Return (annualized) | +1.00% | +12.28%Best |
| Volatility (annualized) | 24.9% | 15.0%Best |
| Max Drawdown | -60.5% | -35.7%Best |
| $10,000 over 5 years | $10,510 | $17,845Best |
| Fund Family | NexPoint | Vanguard (US) |
| Category | Fixed Income | Equity |
| Style | Bank Loan | Large Cap Value |
| Inception | Jan 13, 2000 | Nov 10, 2006 |
Not shown on this pair: Top 10 Weight.
Volatility and max drawdown are measured over the window both funds cover: Nov 6, 2017 to Sep 4, 2026 (8.8 years).
HFRO vs VYM growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 8.8 years both funds cover.
HFRO vs VYM Performance
Highland Opportunities and Income Fund (HFRO) is an ETF from NexPoint and Vanguard High Dividend Yield ETF (VYM) is an ETF from Vanguard (US). Over the past year HFRO returned +29.06% while VYM returned +20.84%. Year to date, HFRO is up 29.29% versus a gain of 14.82% for VYM.
Over three years, HFRO compounded at +4.68% per year against +18.64% for VYM; over five years the annualized figures are +1.00% and +12.28% respectively. Across the full 9-year window we track, VYM has the edge at +10.06% annualized vs -2.98%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
HFRO has been the more volatile fund, with annualized monthly volatility of 24.9% compared with 15.0% 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 -60.5% for HFRO and -35.7% for VYM. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.59. They move together some of the time, and apart the rest.
Fees and Cost Over Time
HFRO charges 1.18% per year while VYM charges 0.04%. On a $10,000 position that is $118 vs $4 annually, a gap of $114 per year that compounds over a long holding period. On income, HFRO currently yields 3.92% against 2.24% for VYM.
Holdings Overlap
We hold position weights for 13 holdings in HFRO and 602 in VYM, totalling 18.8% and 99.5% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
The two holdings books were reported 91 days apart, HFRO as of Mar 31, 2026 and VYM as of Jun 30, 2026, so some of the difference between them is the time between the two reports rather than the funds.
0 positions in common, counted across the 13 positions we hold weights for in HFRO and 602 in VYM, against full books of 63 and 613.
You are not choosing between two funds in isolation.
Whichever of HFRO and VYM you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, HFRO or VYM?
HFRO has an expense ratio of 1.18% while VYM charges 0.04%. VYM is the cheaper option, by $114 a year on a $10,000 investment.
Which performed better, HFRO or VYM?
Over the past year HFRO returned +29.06% vs +20.84% for VYM, so HFRO leads on 1-year performance. Over the longest common window we track (9 years), HFRO annualized -2.98% vs +10.06% for VYM. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, HFRO or VYM?
HFRO has been the more volatile fund at 24.9% annualized versus 15.0% for VYM. Worst drawdown: HFRO -60.5% vs VYM -35.7%.
Should I hold both HFRO and VYM?
HFRO and VYM have a monthly-return correlation of 0.59, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, HFRO or VYM?
HFRO yields 3.92% while VYM yields 2.24%, so HFRO currently pays the higher dividend yield.
Is VYM better than HFRO?
VYM has a lower expense ratio. HFRO led over 1Y, VYM over 3Y, 5Y and the full window. Which one suits a particular account depends on what it is for. This is information, not a recommendation.