VWO vs VYM
Vanguard FTSE Emerging Markets ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VWO offers more diversification with 6,334 holdings.
Side-by-Side Comparison
| Metric | VWO | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.04% | |
| AUM | $122.0B | $81.6B | |
| Dividend Yield | 2.39% | 2.24% | |
| Holdings | 6,334 | 616 | |
| YTD Return | +9.40% | +14.66% | |
| 1Y Return | +19.92% | +22.16% | |
| 3Y Return (annualized) | +18.10% | +18.72% | |
| 5Y Return (annualized) | +7.28% | +12.18% | |
| Volatility (annualized) | 20.1% | 14.6% | |
| Max Drawdown | -68.3% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Mar 4, 2005 | Nov 10, 2006 |
VWO vs VYM Performance
Vanguard FTSE Emerging Markets ETF (VWO) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VWO returned +19.92% while VYM returned +22.16%. Year to date, VWO is up 9.40% versus a gain of 14.66% for VYM.
Over three years, VWO compounded at +18.10% per year against +18.72% for VYM; over five years the annualized figures are +7.28% and +12.18% respectively. Across the full 20-year window we track, VYM has the edge at +7.01% annualized vs +4.94%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VWO has been the more volatile fund, with annualized monthly volatility of 20.1% 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 -68.3% for VWO 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 0.69. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VWO charges 0.06% per year while VYM charges 0.04%. On a $10,000 position that is $6 vs $4 annually, a gap of $2 per year that compounds over a long holding period. On income, VWO currently yields 2.39% against 2.24% for VYM.
Holdings Overlap
VWO and VYM share 0 holdings out of 4587 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, VWO or VYM?
VWO has an expense ratio of 0.06% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, VWO or VYM?
Over the past year VWO returned +19.92% vs +22.16% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VWO annualized +4.94% vs +7.01% for VYM. Past performance does not guarantee future results.
Which is riskier, VWO or VYM?
VWO has been the more volatile fund at 20.1% annualized versus 14.6% for VYM. Worst drawdown: VWO -68.3% vs VYM -58.8%.
Should I hold both VWO and VYM?
VWO and VYM have a monthly-return correlation of 0.69, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VWO and VYM?
VWO and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4587 unique securities.
Which pays a higher dividend, VWO or VYM?
VWO yields 2.39% while VYM yields 2.24%, so VWO currently pays the higher dividend yield.
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