TAFM vs VYM
AB Tax-Aware Intermediate 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 | TAFM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.04% | |
| AUM | $700M | $79.0B | |
| Dividend Yield | 2.79% | 2.86% | |
| Holdings | 560 | 568 | |
| YTD Return | +1.00% | +16.16% | |
| 1Y Return | +5.56% | +26.05% | |
| 3Y Return (annualized) | - | +18.43% | |
| 5Y Return (annualized) | - | +12.21% | |
| Volatility (annualized) | 4.0% | 14.6% | |
| Max Drawdown | -4.7% | -58.8% | |
| Fund Family | AllianceBernstein L.P. | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Dec 13, 2023 | Nov 10, 2006 |
TAFM vs VYM Performance
AB Tax-Aware Intermediate Municipal ETF (TAFM) is a ETF from AllianceBernstein L.P. and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year TAFM returned +5.56% while VYM returned +26.05%. Year to date, TAFM is up 1.00% 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 4.0% for TAFM. 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 -4.7% for TAFM 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 0.57. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TAFM 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, TAFM currently yields 2.79% against 2.86% for VYM.
Holdings Overlap
TAFM and VYM share 0 holdings out of 779 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, TAFM or VYM?
TAFM 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, TAFM or VYM?
Over the past year TAFM returned +5.56% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (3 years), TAFM annualized +3.54% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, TAFM or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 4.0% for TAFM. Worst drawdown: TAFM -4.7% vs VYM -58.8%.
Should I hold both TAFM and VYM?
TAFM and VYM have a monthly-return correlation of 0.57, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TAFM and VYM?
TAFM and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 779 unique securities.
Which pays a higher dividend, TAFM or VYM?
TAFM yields 2.79% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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