TEI vs VYM
Templeton Emerging Markets Income Fund Inc. vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. TEI delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | TEI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 1.14% | 0.04% | |
| AUM | $2,711.9 | $79.0B | |
| Dividend Yield | 12.41% | 2.86% | |
| Holdings | 151 | 568 | |
| YTD Return | +9.87% | +15.80% | |
| 1Y Return | +28.63% | +26.12% | |
| 3Y Return (annualized) | +23.94% | +18.25% | |
| 5Y Return (annualized) | +8.86% | +12.51% | |
| Volatility (annualized) | 17.9% | 14.6% | |
| Max Drawdown | -71.1% | -58.8% | |
| Fund Family | Franklin Templeton Investments (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Sep 23, 1993 | Nov 10, 2006 |
TEI vs VYM Performance
Templeton Emerging Markets Income Fund Inc. (TEI) 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 TEI returned +28.63% while VYM returned +26.12%. Year to date, TEI is up 9.87% versus a gain of 15.80% for VYM.
Over three years, TEI compounded at +23.94% per year against +18.25% for VYM; over five years the annualized figures are +8.86% and +12.51% respectively. Across the full 20-year window we track, VYM has the edge at +7.07% annualized vs +0.38%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
TEI has been the more volatile fund, with annualized monthly volatility of 17.9% 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 -71.1% for TEI 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 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TEI charges 1.14% per year while VYM charges 0.04%. On a $10,000 position that is $114 vs $4 annually, a gap of $110 per year that compounds over a long holding period. On income, TEI currently yields 12.41% against 2.86% for VYM.
Holdings Overlap
TEI and VYM share 0 holdings out of 578 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, TEI or VYM?
TEI has an expense ratio of 1.14% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $110 per year of difference.
Which performed better, TEI or VYM?
Over the past year TEI returned +28.63% vs +26.12% for VYM, so TEI leads on 1-year performance. Over the longest common window we track (20 years), TEI annualized +0.38% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, TEI or VYM?
TEI has been the more volatile fund at 17.9% annualized versus 14.6% for VYM. Worst drawdown: TEI -71.1% vs VYM -58.8%.
Should I hold both TEI and VYM?
TEI and VYM have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TEI and VYM?
TEI and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 578 unique securities.
Which pays a higher dividend, TEI or VYM?
TEI yields 12.41% while VYM yields 2.86%, so TEI currently pays the higher dividend yield.
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