NMZ vs VYM
NMZ vs VYM
Nuveen Municipal High Income Opportunity 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 | NMZ | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 3.75% | 0.04% | |
| AUM | - | $79.0B | |
| Dividend Yield | 7.49% | 2.86% | |
| Holdings | 893 | 568 | |
| YTD Return | +5.42% | +15.80% | |
| 1Y Return | +10.50% | +26.12% | |
| 3Y Return (annualized) | +6.76% | +18.25% | |
| 5Y Return (annualized) | -1.81% | +12.51% | |
| Volatility (annualized) | 14.1% | 14.6% | |
| Max Drawdown | -63.5% | -58.8% | |
| Fund Family | Nuveen | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 19, 2003 | Nov 10, 2006 |
NMZ vs VYM Performance
Nuveen Municipal High Income Opportunity Fund (NMZ) is a ETF from Nuveen and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year NMZ returned +10.50% while VYM returned +26.12%. Year to date, NMZ is up 5.42% versus a gain of 15.80% for VYM.
Over three years, NMZ compounded at +6.76% per year against +18.25% for VYM; over five years the annualized figures are -1.81% and +12.51% respectively. Across the full 20-year window we track, VYM has the edge at +7.07% annualized vs -0.23%. 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 NMZ. 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 -63.5% for NMZ 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 0.36. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
NMZ charges 3.75% per year while VYM charges 0.04%. On a $10,000 position that is $375 vs $4 annually, a gap of $371 per year that compounds over a long holding period. On income, NMZ currently yields 7.49% against 2.86% for VYM.
Holdings Overlap
NMZ and VYM share 0 holdings out of 793 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, NMZ or VYM?
NMZ has an expense ratio of 3.75% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $371 per year of difference.
Which performed better, NMZ or VYM?
Over the past year NMZ returned +10.50% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), NMZ annualized -0.23% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, NMZ or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 14.1% for NMZ. Worst drawdown: NMZ -63.5% vs VYM -58.8%.
Should I hold both NMZ and VYM?
NMZ and VYM have a monthly-return correlation of 0.36, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between NMZ and VYM?
NMZ and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 793 unique securities.
Which pays a higher dividend, NMZ or VYM?
NMZ yields 7.49% while VYM yields 2.86%, so NMZ currently pays the higher dividend yield.
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