NZF vs VYM
Nuveen Municipal Credit Income Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. NZF offers more diversification with 671 holdings.
Side-by-Side Comparison
| Metric | NZF | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 3.61% | 0.04% | |
| AUM | - | $79.0B | |
| Dividend Yield | 7.54% | 2.86% | |
| Holdings | 671 | 568 | |
| YTD Return | +2.93% | +16.78% | |
| 1Y Return | +11.85% | +24.43% | |
| 3Y Return (annualized) | +10.22% | +18.60% | |
| 5Y Return (annualized) | -0.51% | +12.30% | |
| Volatility (annualized) | 13.0% | 14.6% | |
| Max Drawdown | -53.7% | -58.8% | |
| Fund Family | Nuveen | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Sep 25, 2001 | Nov 10, 2006 |
NZF vs VYM Performance
Nuveen Municipal Credit Income Fund (NZF) is a ETF from Nuveen and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year NZF returned +11.85% while VYM returned +24.43%. Year to date, NZF is up 2.93% versus a gain of 16.78% for VYM.
Over three years, NZF compounded at +10.22% per year against +18.60% for VYM; over five years the annualized figures are -0.51% and +12.30% respectively. Across the full 20-year window we track, VYM has the edge at +7.11% annualized vs +0.58%. 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 13.0% for NZF. 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 -53.7% for NZF 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 0.30. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
NZF charges 3.61% per year while VYM charges 0.04%. On a $10,000 position that is $361 vs $4 annually, a gap of $357 per year that compounds over a long holding period. On income, NZF currently yields 7.54% against 2.86% for VYM.
Holdings Overlap
NZF and VYM share 0 holdings out of 812 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, NZF or VYM?
NZF has an expense ratio of 3.61% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $357 per year of difference.
Which performed better, NZF or VYM?
Over the past year NZF returned +11.85% vs +24.43% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), NZF annualized +0.58% vs +7.11% for VYM. Past performance does not guarantee future results.
Which is riskier, NZF or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 13.0% for NZF. Worst drawdown: NZF -53.7% vs VYM -58.8%.
Should I hold both NZF and VYM?
NZF and VYM have a monthly-return correlation of 0.30, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between NZF and VYM?
NZF and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 812 unique securities.
Which pays a higher dividend, NZF or VYM?
NZF yields 7.54% while VYM yields 2.86%, so NZF currently pays the higher dividend yield.
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