VSDM vs VYM
Vanguard Short Duration Tax-Exempt Bond 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 | VSDM | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.12% | 0.04% | |
| AUM | $763M | $79.0B | |
| Dividend Yield | 3.10% | 2.86% | |
| Holdings | 3,774 | 568 | |
| YTD Return | -0.30% | +16.53% | |
| 1Y Return | +1.46% | +25.03% | |
| 3Y Return (annualized) | - | +18.54% | |
| 5Y Return (annualized) | - | +12.25% | |
| Volatility (annualized) | 2.1% | 14.6% | |
| Max Drawdown | -2.0% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 19, 2024 | Nov 10, 2006 |
VSDM vs VYM Performance
Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VSDM returned +1.46% while VYM returned +25.03%. Year to date, VSDM is down 0.30% versus a gain of 16.53% for VYM.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 2.1% for VSDM. 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 -2.0% for VSDM 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VSDM charges 0.12% per year while VYM charges 0.04%. On a $10,000 position that is $12 vs $4 annually, a gap of $8 per year that compounds over a long holding period. On income, VSDM currently yields 3.10% against 2.86% for VYM.
Holdings Overlap
VSDM and VYM share 0 holdings out of 982 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, VSDM or VYM?
VSDM has an expense ratio of 0.12% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $8 per year of difference.
Which performed better, VSDM or VYM?
Over the past year VSDM returned +1.46% vs +25.03% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (2 years), VSDM annualized +3.42% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, VSDM or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.1% for VSDM. Worst drawdown: VSDM -2.0% vs VYM -58.8%.
Should I hold both VSDM and VYM?
VSDM and VYM have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VSDM and VYM?
VSDM and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 982 unique securities.
Which pays a higher dividend, VSDM or VYM?
VSDM yields 3.10% while VYM yields 2.86%, so VSDM currently pays the higher dividend yield.
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