VTBNX vs VYM
Vanguard Total Bond Market II Index Fund Institutional Shares vs Vanguard High Dividend Yield ETF
Quick Verdict
VTBNX has a lower expense ratio. VYM delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VTBNX | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.02% | 0.04% | |
| AUM | $206.7B | $81.6B | |
| Dividend Yield | 3.73% | 2.24% | |
| Holdings | 15,623 | 616 | |
| YTD Return | -2.49% | +16.78% | |
| 1Y Return | -1.68% | +24.43% | |
| 3Y Return (annualized) | +0.43% | +18.60% | |
| 5Y Return (annualized) | -3.56% | +12.30% | |
| Volatility (annualized) | 6.3% | 14.6% | |
| Max Drawdown | -21.5% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 17, 2009 | Nov 10, 2006 |
VTBNX vs VYM Performance
Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VTBNX returned -1.68% while VYM returned +24.43%. Year to date, VTBNX is down 2.49% versus a gain of 16.78% for VYM.
Over three years, VTBNX compounded at +0.43% per year against +18.60% for VYM; over five years the annualized figures are -3.56% and +12.30% respectively. Across the full 5-year window we track, VYM has the edge at +7.11% annualized vs -3.56%. 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 6.3% for VTBNX. 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 -21.5% for VTBNX 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 0.57. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTBNX charges 0.02% per year while VYM charges 0.04%. On a $10,000 position that is $2 vs $4 annually, a gap of $2 per year that compounds over a long holding period. On income, VTBNX currently yields 3.73% against 2.24% for VYM.
Holdings Overlap
VTBNX and VYM share 10 holdings out of 8691 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VTBNX | Weight in VYM | Difference |
|---|---|---|---|
| DIS 6.55 03/15/33 | 0.00% | 0.71% | 0.71% |
| DUK | 0.00% | 0.41% | 0.41% |
| MMC 4.75 03/15/39 | 0.01% | 0.33% | 0.32% |
| HUM 4.625 12/01/42 | Pro | Pro | Pro |
| KDP | Pro | Pro | Pro |
| ZTS 3 09/12/27 | Pro | Pro | Pro |
| CNP | Pro | Pro | Pro |
| HUBB | Pro | Pro | Pro |
| RPRX | Pro | Pro | Pro |
| LEN 4.75 11/29/27 | Pro | Pro | Pro |
Frequently Asked Questions
Which is cheaper, VTBNX or VYM?
VTBNX has an expense ratio of 0.02% while VYM charges 0.04%. VTBNX is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, VTBNX or VYM?
Over the past year VTBNX returned -1.68% vs +24.43% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (5 years), VTBNX annualized -3.56% vs +7.11% for VYM. Past performance does not guarantee future results.
Which is riskier, VTBNX or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 6.3% for VTBNX. Worst drawdown: VTBNX -21.5% vs VYM -58.8%.
Should I hold both VTBNX and VYM?
VTBNX and VYM have a monthly-return correlation of 0.57, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTBNX and VYM?
VTBNX and VYM share 10 common holdings with a 0.0% weight overlap. Combined, they hold 8691 unique securities.
Which pays a higher dividend, VTBNX or VYM?
VTBNX yields 3.73% while VYM yields 2.24%, so VTBNX currently pays the higher dividend yield.
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