TAFL vs VYM
AB Tax-Aware Long 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 616 holdings.
Side-by-Side Comparison
| Metric | TAFL | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.04% | |
| AUM | $65M | $81.6B | |
| Dividend Yield | 4.15% | 2.24% | |
| Holdings | 156 | 616 | |
| YTD Return | +1.28% | +15.60% | |
| 1Y Return | +7.15% | +23.48% | |
| 3Y Return (annualized) | - | +19.07% | |
| 5Y Return (annualized) | - | +12.50% | |
| Volatility (annualized) | 4.8% | 14.6% | |
| Max Drawdown | -6.3% | -58.8% | |
| Fund Family | AllianceBernstein L.P. | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Dec 13, 2023 | Nov 10, 2006 |
TAFL vs VYM Performance
AB Tax-Aware Long Municipal ETF (TAFL) is a ETF from AllianceBernstein L.P. and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year TAFL returned +7.15% while VYM returned +23.48%. Year to date, TAFL is up 1.28% versus a gain of 15.60% for VYM.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 4.8% for TAFL. 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 -6.3% for TAFL 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 0.50. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TAFL charges 0.28% per year while VYM charges 0.04%. On a $10,000 position that is $28 vs $4 annually, a gap of $24 per year that compounds over a long holding period. On income, TAFL currently yields 4.15% against 2.24% for VYM.
Holdings Overlap
TAFL and VYM share 0 holdings out of 670 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, TAFL or VYM?
TAFL has an expense ratio of 0.28% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $24 per year of difference.
Which performed better, TAFL or VYM?
Over the past year TAFL returned +7.15% vs +23.48% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (3 years), TAFL annualized +3.28% vs +7.05% for VYM. Past performance does not guarantee future results.
Which is riskier, TAFL or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 4.8% for TAFL. Worst drawdown: TAFL -6.3% vs VYM -58.8%.
Should I hold both TAFL and VYM?
TAFL and VYM have a monthly-return correlation of 0.50, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TAFL and VYM?
TAFL and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 670 unique securities.
Which pays a higher dividend, TAFL or VYM?
TAFL yields 4.15% while VYM yields 2.24%, so TAFL currently pays the higher dividend yield.
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