VGM vs VYM
Invesco Trust for Investment Grade Municipals 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 558 holdings.
Side-by-Side Comparison
| Metric | VGM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 3.13% | 0.04% | |
| AUM | $3,008.32 | $79.0B | |
| Dividend Yield | 7.40% | 2.86% | |
| Holdings | 534 | 568 | |
| YTD Return | +4.65% | +16.53% | |
| 1Y Return | +16.56% | +25.03% | |
| 3Y Return (annualized) | +10.44% | +18.54% | |
| 5Y Return (annualized) | +0.04% | +12.25% | |
| Volatility (annualized) | 12.4% | 14.6% | |
| Max Drawdown | -58.5% | -58.8% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jan 24, 1992 | Nov 10, 2006 |
VGM vs VYM Performance
Invesco Trust for Investment Grade Municipals (VGM) is a ETF from Invesco (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VGM returned +16.56% while VYM returned +25.03%. Year to date, VGM is up 4.65% versus a gain of 16.53% for VYM.
Over three years, VGM compounded at +10.44% per year against +18.54% for VYM; over five years the annualized figures are +0.04% and +12.25% respectively. Across the full 20-year window we track, VYM has the edge at +7.10% annualized vs -0.28%. 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 12.4% for VGM. 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 -58.5% for VGM 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 0.27. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGM charges 3.13% per year while VYM charges 0.04%. On a $10,000 position that is $313 vs $4 annually, a gap of $309 per year that compounds over a long holding period. On income, VGM currently yields 7.40% against 2.86% for VYM.
Holdings Overlap
VGM and VYM share 0 holdings out of 828 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VGM or VYM?
VGM has an expense ratio of 3.13% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $309 per year of difference.
Which performed better, VGM or VYM?
Over the past year VGM returned +16.56% vs +25.03% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VGM annualized -0.28% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, VGM or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 12.4% for VGM. Worst drawdown: VGM -58.5% vs VYM -58.8%.
Should I hold both VGM and VYM?
VGM and VYM have a monthly-return correlation of 0.27, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGM and VYM?
VGM and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 828 unique securities.
Which pays a higher dividend, VGM or VYM?
VGM yields 7.40% while VYM yields 2.86%, so VGM currently pays the higher dividend yield.
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