VGUS vs VYM
Vanguard Ultra-Short Treasury 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 558 holdings.
Side-by-Side Comparison
| Metric | VGUS | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.07% | 0.04% | |
| AUM | $1.0B | $79.0B | |
| Dividend Yield | 3.60% | 2.86% | |
| Holdings | 91 | 568 | |
| YTD Return | +1.80% | +16.16% | |
| 1Y Return | +3.48% | +26.05% | |
| 3Y Return (annualized) | - | +18.43% | |
| 5Y Return (annualized) | - | +12.21% | |
| Volatility (annualized) | 0.7% | 14.6% | |
| Max Drawdown | -0.3% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 7, 2025 | Nov 10, 2006 |
VGUS vs VYM Performance
Vanguard Ultra-Short Treasury ETF (VGUS) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VGUS returned +3.48% while VYM returned +26.05%. Year to date, VGUS is up 1.80% versus a gain of 16.16% for VYM.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 0.7% for VGUS. 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 -0.3% for VGUS 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 -0.12. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGUS charges 0.07% per year while VYM charges 0.04%. On a $10,000 position that is $7 vs $4 annually, a gap of $3 per year that compounds over a long holding period. On income, VGUS currently yields 3.60% against 2.86% for VYM.
Holdings Overlap
VGUS and VYM share 0 holdings out of 609 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, VGUS or VYM?
VGUS has an expense ratio of 0.07% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, VGUS or VYM?
Over the past year VGUS returned +3.48% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (2 years), VGUS annualized +4.60% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, VGUS or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 0.7% for VGUS. Worst drawdown: VGUS -0.3% vs VYM -58.8%.
Should I hold both VGUS and VYM?
VGUS and VYM have a monthly-return correlation of -0.12, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGUS and VYM?
VGUS and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 609 unique securities.
Which pays a higher dividend, VGUS or VYM?
VGUS yields 3.60% while VYM yields 2.86%, so VGUS currently pays the higher dividend yield.
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