VFQY vs VYM
Vanguard US Quality Factor 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 | VFQY | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.13% | 0.04% | |
| AUM | $485M | $81.6B | |
| Dividend Yield | 1.04% | 2.24% | |
| Holdings | 409 | 616 | |
| YTD Return | +15.70% | +15.34% | |
| 1Y Return | +21.06% | +23.24% | |
| 3Y Return (annualized) | +17.30% | +19.22% | |
| 5Y Return (annualized) | +9.29% | +12.21% | |
| Volatility (annualized) | 18.2% | 14.6% | |
| Max Drawdown | -37.4% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Feb 13, 2018 | Nov 10, 2006 |
VFQY vs VYM Performance
Vanguard US Quality Factor ETF (VFQY) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VFQY returned +21.06% while VYM returned +23.24%. Year to date, VFQY is up 15.70% versus a gain of 15.34% for VYM.
Over three years, VFQY compounded at +17.30% per year against +19.22% for VYM; over five years the annualized figures are +9.29% and +12.21% respectively. Across the full 9-year window we track, VFQY has the edge at +11.78% annualized vs +7.04%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VFQY has been the more volatile fund, with annualized monthly volatility of 18.2% 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 -37.4% for VFQY 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
VFQY charges 0.13% per year while VYM charges 0.04%. On a $10,000 position that is $13 vs $4 annually, a gap of $9 per year that compounds over a long holding period. On income, VFQY currently yields 1.04% against 2.24% for VYM.
Holdings Overlap
VFQY and VYM share 122 holdings out of 923 unique holdings combined, representing a 10.9% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VFQY or VYM?
VFQY has an expense ratio of 0.13% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, VFQY or VYM?
Over the past year VFQY returned +21.06% vs +23.24% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (9 years), VFQY annualized +11.78% vs +7.04% for VYM. Past performance does not guarantee future results.
Which is riskier, VFQY or VYM?
VFQY has been the more volatile fund at 18.2% annualized versus 14.6% for VYM. Worst drawdown: VFQY -37.4% vs VYM -58.8%.
Should I hold both VFQY and VYM?
VFQY 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 VFQY and VYM?
VFQY and VYM share 122 common holdings with a 10.9% weight overlap. Combined, they hold 923 unique securities.
Which pays a higher dividend, VFQY or VYM?
VFQY yields 1.04% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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