VBF vs VYM
Invesco Bond Fund vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VBF offers more diversification with 1017 holdings.
Side-by-Side Comparison
| Metric | VBF | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.54% | 0.04% | |
| AUM | $4,400.74 | $79.0B | |
| Dividend Yield | 5.07% | 2.86% | |
| Holdings | 1,492 | 568 | |
| YTD Return | -1.13% | +15.80% | |
| 1Y Return | +0.15% | +26.12% | |
| 3Y Return (annualized) | +5.16% | +18.25% | |
| 5Y Return (annualized) | -1.89% | +12.51% | |
| Volatility (annualized) | 10.5% | 14.6% | |
| Max Drawdown | -41.6% | -58.8% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 28, 1970 | Nov 10, 2006 |
VBF vs VYM Performance
Invesco Bond Fund (VBF) is a ETF from Invesco (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VBF returned +0.15% while VYM returned +26.12%. Year to date, VBF is down 1.13% versus a gain of 15.80% for VYM.
Over three years, VBF compounded at +5.16% per year against +18.25% for VYM; over five years the annualized figures are -1.89% and +12.51% respectively. Across the full 20-year window we track, VYM has the edge at +7.07% annualized vs -0.06%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 10.5% for VBF. 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 -41.6% for VBF 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 0.34. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VBF charges 0.54% per year while VYM charges 0.04%. On a $10,000 position that is $54 vs $4 annually, a gap of $50 per year that compounds over a long holding period. On income, VBF currently yields 5.07% against 2.86% for VYM.
Holdings Overlap
Frequently Asked Questions
Which is cheaper, VBF or VYM?
VBF has an expense ratio of 0.54% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $50 per year of difference.
Which performed better, VBF or VYM?
Over the past year VBF returned +0.15% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VBF annualized -0.06% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, VBF or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 10.5% for VBF. Worst drawdown: VBF -41.6% vs VYM -58.8%.
Should I hold both VBF and VYM?
VBF and VYM have a monthly-return correlation of 0.34, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VBF and VYM?
VBF and VYM share 2 common holdings with a 0.1% weight overlap. Combined, they hold 1573 unique securities.
Which pays a higher dividend, VBF or VYM?
VBF yields 5.07% while VYM yields 2.86%, so VBF currently pays the higher dividend yield.
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