TDF vs VYM
Templeton Dragon Fund 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 | TDF | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 1.33% | 0.04% | |
| AUM | $5,054.4 | $81.6B | |
| Dividend Yield | 3.61% | 2.24% | |
| Holdings | 68 | 616 | |
| YTD Return | -4.56% | +15.75% | |
| 1Y Return | +6.31% | +23.85% | |
| 3Y Return (annualized) | +10.25% | +19.14% | |
| 5Y Return (annualized) | -5.95% | +12.45% | |
| Volatility (annualized) | 26.9% | 14.6% | |
| Max Drawdown | -75.1% | -58.8% | |
| Fund Family | Franklin Templeton Investments (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Sep 8, 1994 | Nov 10, 2006 |
TDF vs VYM Performance
Templeton Dragon Fund (TDF) is a ETF from Franklin Templeton Investments (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year TDF returned +6.31% while VYM returned +23.85%. Year to date, TDF is down 4.56% versus a gain of 15.75% for VYM.
Over three years, TDF compounded at +10.25% per year against +19.14% for VYM; over five years the annualized figures are -5.95% and +12.45% respectively. Across the full 20-year window we track, VYM has the edge at +7.06% annualized vs +0.29%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
TDF has been the more volatile fund, with annualized monthly volatility of 26.9% compared with 14.6% for VYM. 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 -75.1% for TDF 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 0.46. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TDF charges 1.33% per year while VYM charges 0.04%. On a $10,000 position that is $133 vs $4 annually, a gap of $129 per year that compounds over a long holding period. On income, TDF currently yields 3.61% against 2.24% for VYM.
Holdings Overlap
TDF and VYM share 0 holdings out of 665 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, TDF or VYM?
TDF has an expense ratio of 1.33% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $129 per year of difference.
Which performed better, TDF or VYM?
Over the past year TDF returned +6.31% vs +23.85% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), TDF annualized +0.29% vs +7.06% for VYM. Past performance does not guarantee future results.
Which is riskier, TDF or VYM?
TDF has been the more volatile fund at 26.9% annualized versus 14.6% for VYM. Worst drawdown: TDF -75.1% vs VYM -58.8%.
Should I hold both TDF and VYM?
TDF and VYM have a monthly-return correlation of 0.46, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TDF and VYM?
TDF and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 665 unique securities.
Which pays a higher dividend, TDF or VYM?
TDF yields 3.61% while VYM yields 2.24%, so TDF currently pays the higher dividend yield.
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