SMBS vs VYM
Schwab Mortgage-Backed Securities ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
SMBS has a lower expense ratio. VYM delivered stronger 1-year returns. SMBS offers more diversification with 4175 holdings.
Side-by-Side Comparison
| Metric | SMBS | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $6.5B | $79.0B | |
| Dividend Yield | 5.14% | 2.86% | |
| Holdings | 4,175 | 568 | |
| YTD Return | +0.01% | +16.16% | |
| 1Y Return | +3.64% | +26.05% | |
| 3Y Return (annualized) | - | +18.43% | |
| 5Y Return (annualized) | - | +12.21% | |
| Volatility (annualized) | 3.6% | 14.6% | |
| Max Drawdown | -3.2% | -58.8% | |
| Fund Family | Charles Schwab Asset Management | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2024 | Nov 10, 2006 |
SMBS vs VYM Performance
Schwab Mortgage-Backed Securities ETF (SMBS) is a ETF from Charles Schwab Asset Management and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year SMBS returned +3.64% while VYM returned +26.05%. Year to date, SMBS is up 0.01% versus a gain of 16.16% for VYM.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 3.6% for SMBS. 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 -3.2% for SMBS 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 0.45. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SMBS charges 0.03% per year while VYM charges 0.04%. On a $10,000 position that is $3 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, SMBS currently yields 5.14% against 2.86% for VYM.
Frequently Asked Questions
Which is cheaper, SMBS or VYM?
SMBS has an expense ratio of 0.03% while VYM charges 0.04%. SMBS is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, SMBS or VYM?
Over the past year SMBS returned +3.64% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (2 years), SMBS annualized +4.24% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, SMBS or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 3.6% for SMBS. Worst drawdown: SMBS -3.2% vs VYM -58.8%.
Should I hold both SMBS and VYM?
SMBS and VYM have a monthly-return correlation of 0.45, so combining them can provide real diversification depending on your allocation goals.
Which pays a higher dividend, SMBS or VYM?
SMBS yields 5.14% while VYM yields 2.86%, so SMBS currently pays the higher dividend yield.
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