VAW vs VYM
Vanguard Materials 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 616 holdings.
Side-by-Side Comparison
| Metric | VAW | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.04% | |
| AUM | $2.9B | $81.6B | |
| Dividend Yield | 1.39% | 2.24% | |
| Holdings | 111 | 616 | |
| YTD Return | +12.37% | +15.60% | |
| 1Y Return | +17.34% | +23.48% | |
| 3Y Return (annualized) | +11.65% | +19.07% | |
| 5Y Return (annualized) | +7.20% | +12.50% | |
| Volatility (annualized) | 20.4% | 14.6% | |
| Max Drawdown | -63.5% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Nov 10, 2006 |
VAW vs VYM Performance
Vanguard Materials ETF (VAW) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VAW returned +17.34% while VYM returned +23.48%. Year to date, VAW is up 12.37% versus a gain of 15.60% for VYM.
Over three years, VAW compounded at +11.65% per year against +19.07% for VYM; over five years the annualized figures are +7.20% and +12.50% respectively. Across the full 20-year window we track, VAW has the edge at +7.63% annualized vs +7.05%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VAW has been the more volatile fund, with annualized monthly volatility of 20.4% 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 -63.5% for VAW 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 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VAW charges 0.09% per year while VYM charges 0.04%. On a $10,000 position that is $9 vs $4 annually, a gap of $5 per year that compounds over a long holding period. On income, VAW currently yields 1.39% against 2.24% for VYM.
Holdings Overlap
VAW and VYM share 42 holdings out of 672 unique holdings combined, representing a 3.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VAW or VYM?
VAW has an expense ratio of 0.09% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VAW or VYM?
Over the past year VAW returned +17.34% vs +23.48% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VAW annualized +7.63% vs +7.05% for VYM. Past performance does not guarantee future results.
Which is riskier, VAW or VYM?
VAW has been the more volatile fund at 20.4% annualized versus 14.6% for VYM. Worst drawdown: VAW -63.5% vs VYM -58.8%.
Should I hold both VAW and VYM?
VAW and VYM have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VAW and VYM?
VAW and VYM share 42 common holdings with a 3.3% weight overlap. Combined, they hold 672 unique securities.
Which pays a higher dividend, VAW or VYM?
VAW yields 1.39% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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