VYM vs WDI
Vanguard High Dividend Yield ETF vs Western Asset Diversified Income Fund
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 616 holdings.
Side-by-Side Comparison
| Metric | VYM | WDI | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 1.82% | |
| AUM | $81.6B | $732M | |
| Dividend Yield | 2.24% | 12.80% | |
| Holdings | 616 | 410 | |
| YTD Return | +15.34% | +1.11% | |
| 1Y Return | +23.24% | -2.39% | |
| 3Y Return (annualized) | +19.22% | +11.11% | |
| 5Y Return (annualized) | +12.21% | +2.59% | |
| Volatility (annualized) | 14.6% | 13.9% | |
| Max Drawdown | -58.8% | -32.5% | |
| Fund Family | Vanguard (US) | Franklin Templeton Investments (US) | |
| Category | Equity | Fixed Income | |
| Inception | Nov 10, 2006 | Jun 24, 2021 |
VYM vs WDI Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and Western Asset Diversified Income Fund (WDI) is a ETF from Franklin Templeton Investments (US). Over the past year VYM returned +23.24% while WDI returned -2.39%. Year to date, VYM is up 15.34% versus a gain of 1.11% for WDI.
Over three years, VYM compounded at +19.22% per year against +11.11% for WDI; over five years the annualized figures are +12.21% and +2.59% respectively. Across the full 5-year window we track, VYM has the edge at +7.04% annualized vs +2.64%. 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 13.9% for WDI. 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 -58.8% for VYM and -32.5% for WDI. 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
VYM charges 0.04% per year while WDI charges 1.82%. On a $10,000 position that is $4 vs $182 annually, a gap of $178 per year that compounds over a long holding period. On income, VYM currently yields 2.24% against 12.80% for WDI.
Holdings Overlap
VYM and WDI share 0 holdings out of 795 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, VYM or WDI?
VYM has an expense ratio of 0.04% while WDI charges 1.82%. VYM is the cheaper option. On a $10,000 investment, that is $178 per year of difference.
Which performed better, VYM or WDI?
Over the past year VYM returned +23.24% vs -2.39% for WDI, so VYM leads on 1-year performance. Over the longest common window we track (5 years), VYM annualized +7.04% vs +2.64% for WDI. Past performance does not guarantee future results.
Which is riskier, VYM or WDI?
VYM has been the more volatile fund at 14.6% annualized versus 13.9% for WDI. Worst drawdown: VYM -58.8% vs WDI -32.5%.
Should I hold both VYM and WDI?
VYM and WDI 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 VYM and WDI?
VYM and WDI share 0 common holdings with a 0.0% weight overlap. Combined, they hold 795 unique securities.
Which pays a higher dividend, VYM or WDI?
VYM yields 2.24% while WDI yields 12.80%, so WDI currently pays the higher dividend yield.
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