VGSH vs VYM
Vanguard Short Term Treasury ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VGSH has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 613 holdings.
Side-by-Side Comparison
| Metric | VGSH | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $30.2B | $81.6B | |
| Dividend Yield | 3.85% | 2.24% | |
| Holdings | 94 | 613 | |
| YTD Return | +0.99% | +14.57% | |
| 1Y Return | +2.48% | +21.08% | |
| 3Y Return (annualized) | +4.22% | +18.16% | |
| 5Y Return (annualized) | +1.92% | +12.00% | |
| Volatility (annualized) | 1.4% | 14.6% | |
| Max Drawdown | -6.7% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | Nov 10, 2006 |
VGSH vs VYM Performance
Vanguard Short Term Treasury ETF (VGSH) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VGSH returned +2.48% while VYM returned +21.08%. Year to date, VGSH is up 0.99% versus a gain of 14.57% for VYM.
Over three years, VGSH compounded at +4.22% per year against +18.16% for VYM; over five years the annualized figures are +1.92% and +12.00% respectively. Across the full 17-year window we track, VYM has the edge at +6.99% annualized vs +0.72%. 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 1.4% for VGSH. 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 -6.7% for VGSH 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 -0.01. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGSH 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, VGSH currently yields 3.85% against 2.24% for VYM.
Holdings Overlap
VGSH and VYM share 0 holdings out of 619 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, VGSH or VYM?
VGSH has an expense ratio of 0.03% while VYM charges 0.04%. VGSH is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VGSH or VYM?
Over the past year VGSH returned +2.48% vs +21.08% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (17 years), VGSH annualized +0.72% vs +6.99% for VYM. Past performance does not guarantee future results.
Which is riskier, VGSH or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 1.4% for VGSH. Worst drawdown: VGSH -6.7% vs VYM -58.8%.
Should I hold both VGSH and VYM?
VGSH and VYM have a monthly-return correlation of -0.01, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGSH and VYM?
VGSH and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 619 unique securities.
Which pays a higher dividend, VGSH or VYM?
VGSH yields 3.85% while VYM yields 2.24%, so VGSH currently pays the higher dividend yield.
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