MFM vs VYM
MFS Municipal Income Trust 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 | MFM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 1.45% | 0.04% | |
| AUM | $250M | $79.0B | |
| Dividend Yield | 5.25% | 2.86% | |
| Holdings | 840 | 568 | |
| YTD Return | +3.73% | +16.16% | |
| 1Y Return | +11.06% | +26.05% | |
| 3Y Return (annualized) | +7.12% | +18.43% | |
| 5Y Return (annualized) | -1.35% | +12.21% | |
| Volatility (annualized) | 14.1% | 14.6% | |
| Max Drawdown | -64.8% | -58.8% | |
| Fund Family | MFS Investment Management | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 25, 1986 | Nov 10, 2006 |
MFM vs VYM Performance
MFS Municipal Income Trust (MFM) is a ETF from MFS Investment Management and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year MFM returned +11.06% while VYM returned +26.05%. Year to date, MFM is up 3.73% versus a gain of 16.16% for VYM.
Over three years, MFM compounded at +7.12% per year against +18.43% for VYM; over five years the annualized figures are -1.35% and +12.21% respectively. Across the full 20-year window we track, VYM has the edge at +7.09% annualized vs -1.06%. 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 14.1% for MFM. 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 -64.8% for MFM 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 0.29. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MFM charges 1.45% per year while VYM charges 0.04%. On a $10,000 position that is $145 vs $4 annually, a gap of $141 per year that compounds over a long holding period. On income, MFM currently yields 5.25% against 2.86% for VYM.
Holdings Overlap
MFM and VYM share 0 holdings out of 821 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, MFM or VYM?
MFM has an expense ratio of 1.45% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $141 per year of difference.
Which performed better, MFM or VYM?
Over the past year MFM returned +11.06% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), MFM annualized -1.06% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, MFM or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 14.1% for MFM. Worst drawdown: MFM -64.8% vs VYM -58.8%.
Should I hold both MFM and VYM?
MFM and VYM have a monthly-return correlation of 0.29, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MFM and VYM?
MFM and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 821 unique securities.
Which pays a higher dividend, MFM or VYM?
MFM yields 5.25% while VYM yields 2.86%, so MFM currently pays the higher dividend yield.
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