MDIV vs VYM
First Trust Multi-Asset Diversified Income Index Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | MDIV | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.71% | 0.04% | |
| AUM | $428M | $79.0B | |
| Dividend Yield | 6.13% | 2.86% | |
| Holdings | 125 | 568 | |
| YTD Return | +10.64% | +16.10% | |
| 1Y Return | +12.01% | +25.99% | |
| 3Y Return (annualized) | +10.38% | +18.29% | |
| 5Y Return (annualized) | +6.79% | +12.35% | |
| Volatility (annualized) | 13.6% | 14.6% | |
| Max Drawdown | -57.0% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Aug 13, 2012 | Nov 10, 2006 |
MDIV vs VYM Performance
First Trust Multi-Asset Diversified Income Index Fund (MDIV) 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 MDIV returned +12.01% while VYM returned +25.99%. Year to date, MDIV is up 10.64% versus a gain of 16.10% for VYM.
Over three years, MDIV compounded at +10.38% per year against +18.29% for VYM; over five years the annualized figures are +6.79% and +12.35% respectively. Across the full 14-year window we track, VYM has the edge at +7.08% annualized vs +1.13%. 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 13.6% for MDIV. 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 -57.0% for MDIV 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 0.84. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
MDIV charges 0.71% per year while VYM charges 0.04%. On a $10,000 position that is $71 vs $4 annually, a gap of $67 per year that compounds over a long holding period. On income, MDIV currently yields 6.13% against 2.86% for VYM.
Holdings Overlap
MDIV and VYM share 48 holdings out of 627 unique holdings combined, representing a 5.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MDIV or VYM?
MDIV has an expense ratio of 0.71% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $67 per year of difference.
Which performed better, MDIV or VYM?
Over the past year MDIV returned +12.01% vs +25.99% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (14 years), MDIV annualized +1.13% vs +7.08% for VYM. Past performance does not guarantee future results.
Which is riskier, MDIV or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 13.6% for MDIV. Worst drawdown: MDIV -57.0% vs VYM -58.8%.
Should I hold both MDIV and VYM?
MDIV and VYM have a monthly-return correlation of 0.84, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MDIV and VYM?
MDIV and VYM share 48 common holdings with a 5.1% weight overlap. Combined, they hold 627 unique securities.
Which pays a higher dividend, MDIV or VYM?
MDIV yields 6.13% while VYM yields 2.86%, so MDIV currently pays the higher dividend yield.
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