VBR vs VYM
Vanguard Morningstar Small-Cap Value ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VBR offers more diversification with 847 holdings.
Side-by-Side Comparison
| Metric | VBR | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.04% | |
| AUM | $37.3B | $81.6B | |
| Dividend Yield | 1.76% | 2.24% | |
| Holdings | 847 | 616 | |
| YTD Return | +16.97% | +15.25% | |
| 1Y Return | +21.92% | +22.18% | |
| 3Y Return (annualized) | +16.80% | +18.83% | |
| 5Y Return (annualized) | +9.69% | +12.09% | |
| Volatility (annualized) | 19.0% | 14.6% | |
| Max Drawdown | -64.0% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Nov 10, 2006 |
VBR vs VYM Performance
Vanguard Morningstar Small-Cap Value ETF (VBR) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VBR returned +21.92% while VYM returned +22.18%. Year to date, VBR is up 16.97% versus a gain of 15.25% for VYM.
Over three years, VBR compounded at +16.80% per year against +18.83% for VYM; over five years the annualized figures are +9.69% and +12.09% respectively. Across the full 20-year window we track, VBR has the edge at +7.98% annualized vs +7.03%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VBR has been the more volatile fund, with annualized monthly volatility of 19.0% 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 -64.0% for VBR 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 0.91. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
VBR charges 0.05% per year while VYM charges 0.04%. On a $10,000 position that is $5 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, VBR currently yields 1.76% against 2.24% for VYM.
Holdings Overlap
VBR and VYM share 332 holdings out of 1106 unique holdings combined, representing a 9.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VBR or VYM?
VBR has an expense ratio of 0.05% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VBR or VYM?
Over the past year VBR returned +21.92% vs +22.18% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VBR annualized +7.98% vs +7.03% for VYM. Past performance does not guarantee future results.
Which is riskier, VBR or VYM?
VBR has been the more volatile fund at 19.0% annualized versus 14.6% for VYM. Worst drawdown: VBR -64.0% vs VYM -58.8%.
Should I hold both VBR and VYM?
VBR and VYM have a monthly-return correlation of 0.91, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between VBR and VYM?
VBR and VYM share 332 common holdings with a 9.5% weight overlap. Combined, they hold 1106 unique securities.
Which pays a higher dividend, VBR or VYM?
VBR yields 1.76% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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