VB vs VYM
Vanguard Morningstar Small-Cap ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VB has a lower expense ratio. VB delivered stronger 1-year returns. VB offers more diversification with 1,311 holdings.
Side-by-Side Comparison
| Metric | VB | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $79.7B | $81.6B | |
| Dividend Yield | 1.22% | 2.24% | |
| Holdings | 1,311 | 616 | |
| YTD Return | +17.31% | +15.34% | |
| 1Y Return | +26.06% | +23.24% | |
| 3Y Return (annualized) | +17.80% | +19.22% | |
| 5Y Return (annualized) | +8.25% | +12.21% | |
| Volatility (annualized) | 18.9% | 14.6% | |
| Max Drawdown | -61.0% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Nov 10, 2006 |
VB vs VYM Performance
Vanguard Morningstar Small-Cap ETF (VB) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VB returned +26.06% while VYM returned +23.24%. Year to date, VB is up 17.31% versus a gain of 15.34% for VYM.
Over three years, VB compounded at +17.80% per year against +19.22% for VYM; over five years the annualized figures are +8.25% and +12.21% respectively. Across the full 20-year window we track, VB has the edge at +8.82% annualized vs +7.04%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VB has been the more volatile fund, with annualized monthly volatility of 18.9% 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 -61.0% for VB 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 0.88. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VB charges 0.03% per year while VYM charges 0.04%. On a $10,000 position that is $3 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, VB currently yields 1.22% against 2.24% for VYM.
Holdings Overlap
VB and VYM share 359 holdings out of 1545 unique holdings combined, representing a 9.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VB or VYM?
VB has an expense ratio of 0.03% while VYM charges 0.04%. VB is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VB or VYM?
Over the past year VB returned +26.06% vs +23.24% for VYM, so VB leads on 1-year performance. Over the longest common window we track (20 years), VB annualized +8.82% vs +7.04% for VYM. Past performance does not guarantee future results.
Which is riskier, VB or VYM?
VB has been the more volatile fund at 18.9% annualized versus 14.6% for VYM. Worst drawdown: VB -61.0% vs VYM -58.8%.
Should I hold both VB and VYM?
VB and VYM have a monthly-return correlation of 0.88, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VB and VYM?
VB and VYM share 359 common holdings with a 9.8% weight overlap. Combined, they hold 1545 unique securities.
Which pays a higher dividend, VB or VYM?
VB yields 1.22% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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