TAXT vs VYM
Northern Trust Tax-Exempt Bond 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 | TAXT | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.04% | |
| AUM | $60M | $79.0B | |
| Dividend Yield | 2.54% | 2.86% | |
| Holdings | 441 | 568 | |
| YTD Return | +0.44% | +15.80% | |
| 1Y Return | +4.59% | +26.12% | |
| 3Y Return (annualized) | - | +18.25% | |
| 5Y Return (annualized) | - | +12.51% | |
| Volatility (annualized) | 3.8% | 14.6% | |
| Max Drawdown | -2.5% | -58.8% | |
| Fund Family | Northern Trust Asset Management | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 28, 2025 | Nov 10, 2006 |
TAXT vs VYM Performance
Northern Trust Tax-Exempt Bond ETF (TAXT) is a ETF from Northern Trust Asset Management and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year TAXT returned +4.59% while VYM returned +26.12%. Year to date, TAXT is up 0.44% versus a gain of 15.80% for VYM.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 3.8% for TAXT. 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 -2.5% for TAXT 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
TAXT charges 0.05% per year while VYM charges 0.04%. On a $10,000 position that is $5 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, TAXT currently yields 2.54% against 2.86% for VYM.
Holdings Overlap
TAXT and VYM share 0 holdings out of 740 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, TAXT or VYM?
TAXT has an expense ratio of 0.05% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, TAXT or VYM?
Over the past year TAXT returned +4.59% vs +26.12% for VYM, so VYM leads on 1-year performance. Past performance does not guarantee future results.
Which is riskier, TAXT or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 3.8% for TAXT. Worst drawdown: TAXT -2.5% vs VYM -58.8%.
Should I hold both TAXT and VYM?
TAXT and VYM have a monthly-return correlation of 0.45, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TAXT and VYM?
TAXT and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 740 unique securities.
Which pays a higher dividend, TAXT or VYM?
TAXT yields 2.54% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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