VUG vs VYM
Vanguard Morningstar Growth ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VUG has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 616 holdings.
Side-by-Side Comparison
| Metric | VUG | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $219.5B | $81.6B | |
| Dividend Yield | 0.40% | 2.24% | |
| Holdings | 146 | 616 | |
| YTD Return | +8.11% | +15.36% | |
| 1Y Return | +14.47% | +21.96% | |
| 3Y Return (annualized) | +23.70% | +18.85% | |
| 5Y Return (annualized) | +12.33% | +12.25% | |
| Volatility (annualized) | 16.5% | 14.6% | |
| Max Drawdown | -51.4% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Nov 10, 2006 |
VUG vs VYM Performance
Vanguard Morningstar Growth ETF (VUG) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VUG returned +14.47% while VYM returned +21.96%. Year to date, VUG is up 8.11% versus a gain of 15.36% for VYM.
Over three years, VUG compounded at +23.70% per year against +18.85% for VYM; over five years the annualized figures are +12.33% and +12.25% respectively. Across the full 20-year window we track, VUG has the edge at +11.17% annualized vs +7.03%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VUG has been the more volatile fund, with annualized monthly volatility of 16.5% compared with 14.6% for VYM. 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 -51.4% for VUG 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 0.78. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VUG 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, VUG currently yields 0.40% against 2.24% for VYM.
Holdings Overlap
VUG and VYM share 14 holdings out of 735 unique holdings combined, representing a 7.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VUG or VYM?
VUG has an expense ratio of 0.03% while VYM charges 0.04%. VUG is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VUG or VYM?
Over the past year VUG returned +14.47% vs +21.96% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VUG annualized +11.17% vs +7.03% for VYM. Past performance does not guarantee future results.
Which is riskier, VUG or VYM?
VUG has been the more volatile fund at 16.5% annualized versus 14.6% for VYM. Worst drawdown: VUG -51.4% vs VYM -58.8%.
Should I hold both VUG and VYM?
VUG and VYM have a monthly-return correlation of 0.78, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VUG and VYM?
VUG and VYM share 14 common holdings with a 7.2% weight overlap. Combined, they hold 735 unique securities.
Which pays a higher dividend, VUG or VYM?
VUG yields 0.40% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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