TMFX vs VYM
Motley Fool Next Index 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 | TMFX | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.50% | 0.04% | |
| AUM | $33M | $79.0B | |
| Dividend Yield | 0.05% | 2.86% | |
| Holdings | 191 | 568 | |
| YTD Return | +11.70% | +16.16% | |
| 1Y Return | +18.65% | +26.05% | |
| 3Y Return (annualized) | +15.54% | +18.43% | |
| 5Y Return (annualized) | - | +12.21% | |
| Volatility (annualized) | 20.3% | 14.6% | |
| Max Drawdown | -34.3% | -58.8% | |
| Fund Family | Motley Fool Asset Management | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Dec 30, 2021 | Nov 10, 2006 |
TMFX vs VYM Performance
Motley Fool Next Index ETF (TMFX) is a ETF from Motley Fool Asset Management and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year TMFX returned +18.65% while VYM returned +26.05%. Year to date, TMFX is up 11.70% versus a gain of 16.16% for VYM.
Over three years, TMFX compounded at +15.54% per year against +18.43% for VYM. Across the full 5-year window we track, VYM has the edge at +7.09% annualized vs +4.45%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
TMFX has been the more volatile fund, with annualized monthly volatility of 20.3% 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 -34.3% for TMFX 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 0.76. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
TMFX charges 0.50% per year while VYM charges 0.04%. On a $10,000 position that is $50 vs $4 annually, a gap of $46 per year that compounds over a long holding period. On income, TMFX currently yields 0.05% against 2.86% for VYM.
Holdings Overlap
TMFX and VYM share 20 holdings out of 728 unique holdings combined, representing a 0.9% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, TMFX or VYM?
TMFX has an expense ratio of 0.50% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $46 per year of difference.
Which performed better, TMFX or VYM?
Over the past year TMFX returned +18.65% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (5 years), TMFX annualized +4.45% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, TMFX or VYM?
TMFX has been the more volatile fund at 20.3% annualized versus 14.6% for VYM. Worst drawdown: TMFX -34.3% vs VYM -58.8%.
Should I hold both TMFX and VYM?
TMFX and VYM have a monthly-return correlation of 0.76, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TMFX and VYM?
TMFX and VYM share 20 common holdings with a 0.9% weight overlap. Combined, they hold 728 unique securities.
Which pays a higher dividend, TMFX or VYM?
TMFX yields 0.05% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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