MGC vs VYM
Vanguard Mega Cap ETF 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 | MGC | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.04% | |
| AUM | $10.0B | $79.0B | |
| Dividend Yield | 1.15% | 2.86% | |
| Holdings | 176 | 568 | |
| YTD Return | +13.54% | +16.10% | |
| 1Y Return | +23.27% | +25.99% | |
| 3Y Return (annualized) | +23.14% | +18.29% | |
| 5Y Return (annualized) | +13.95% | +12.35% | |
| Volatility (annualized) | 15.7% | 14.6% | |
| Max Drawdown | -53.0% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Dec 17, 2007 | Nov 10, 2006 |
MGC vs VYM Performance
Vanguard Mega Cap ETF (MGC) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year MGC returned +23.27% while VYM returned +25.99%. Year to date, MGC is up 13.54% versus a gain of 16.10% for VYM.
Over three years, MGC compounded at +23.14% per year against +18.29% for VYM; over five years the annualized figures are +13.95% and +12.35% respectively. Across the full 19-year window we track, MGC has the edge at +10.10% annualized vs +7.08%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
MGC has been the more volatile fund, with annualized monthly volatility of 15.7% compared with 14.6% 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 -53.0% for MGC 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 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
MGC charges 0.05% per year while VYM charges 0.04%. On a $10,000 position that is $5 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, MGC currently yields 1.15% against 2.86% for VYM.
Holdings Overlap
MGC and VYM share 84 holdings out of 647 unique holdings combined, representing a 30.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MGC or VYM?
MGC has an expense ratio of 0.05% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, MGC or VYM?
Over the past year MGC returned +23.27% vs +25.99% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (19 years), MGC annualized +10.10% vs +7.08% for VYM. Past performance does not guarantee future results.
Which is riskier, MGC or VYM?
MGC has been the more volatile fund at 15.7% annualized versus 14.6% for VYM. Worst drawdown: MGC -53.0% vs VYM -58.8%.
Should I hold both MGC and VYM?
MGC and VYM have a monthly-return correlation of 0.90, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between MGC and VYM?
MGC and VYM share 84 common holdings with a 30.5% weight overlap. Combined, they hold 647 unique securities.
Which pays a higher dividend, MGC or VYM?
MGC yields 1.15% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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