TAFI vs VYM
AB Tax Aware Short Duration Municipal 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 | TAFI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.27% | 0.04% | |
| AUM | $1.4B | $79.0B | |
| Dividend Yield | 2.98% | 2.86% | |
| Holdings | 624 | 568 | |
| YTD Return | +1.00% | +16.16% | |
| 1Y Return | +2.56% | +26.05% | |
| 3Y Return (annualized) | +3.50% | +18.43% | |
| 5Y Return (annualized) | - | +12.21% | |
| Volatility (annualized) | 2.3% | 14.6% | |
| Max Drawdown | -1.9% | -58.8% | |
| Fund Family | AllianceBernstein L.P. | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Sep 13, 2022 | Nov 10, 2006 |
TAFI vs VYM Performance
AB Tax Aware Short Duration Municipal ETF (TAFI) is a ETF from AllianceBernstein L.P. and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year TAFI returned +2.56% while VYM returned +26.05%. Year to date, TAFI is up 1.00% versus a gain of 16.16% for VYM.
Over three years, TAFI compounded at +3.50% per year against +18.43% for VYM. Across the full 4-year window we track, VYM has the edge at +7.09% annualized vs +3.27%. 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 2.3% for TAFI. 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 -1.9% for TAFI 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 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TAFI charges 0.27% per year while VYM charges 0.04%. On a $10,000 position that is $27 vs $4 annually, a gap of $23 per year that compounds over a long holding period. On income, TAFI currently yields 2.98% against 2.86% for VYM.
Holdings Overlap
TAFI and VYM share 1 holdings out of 736 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in TAFI | Weight in VYM | Difference |
|---|---|---|---|
| C | 0.01% | 0.81% | 0.80% |
Frequently Asked Questions
Which is cheaper, TAFI or VYM?
TAFI has an expense ratio of 0.27% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $23 per year of difference.
Which performed better, TAFI or VYM?
Over the past year TAFI returned +2.56% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (4 years), TAFI annualized +3.27% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, TAFI or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.3% for TAFI. Worst drawdown: TAFI -1.9% vs VYM -58.8%.
Should I hold both TAFI and VYM?
TAFI and VYM have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TAFI and VYM?
TAFI and VYM share 1 common holdings with a 0.0% weight overlap. Combined, they hold 736 unique securities.
Which pays a higher dividend, TAFI or VYM?
TAFI yields 2.98% while VYM yields 2.86%, so TAFI currently pays the higher dividend yield.
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