VYM vs XAR
Vanguard High Dividend Yield ETF vs State Street SPDR S&P Aerospace & Defense ETF
Quick Verdict
VYM has a lower expense ratio. XAR delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | VYM | XAR | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.35% | |
| AUM | $79.0B | $6.1B | |
| Dividend Yield | 2.86% | 0.28% | |
| Holdings | 568 | 49 | |
| YTD Return | +16.78% | +16.73% | |
| 1Y Return | +24.43% | +33.85% | |
| 3Y Return (annualized) | +18.60% | +34.38% | |
| 5Y Return (annualized) | +12.30% | +19.45% | |
| Volatility (annualized) | 14.6% | 20.4% | |
| Max Drawdown | -58.8% | -46.7% | |
| Fund Family | Vanguard (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Sep 28, 2011 |
VYM vs XAR Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and State Street SPDR S&P Aerospace & Defense ETF (XAR) is a ETF from State Street Investment Management. Over the past year VYM returned +24.43% while XAR returned +33.85%. Year to date, VYM is up 16.78% versus a gain of 16.73% for XAR.
Over three years, VYM compounded at +18.60% per year against +34.38% for XAR; over five years the annualized figures are +12.30% and +19.45% respectively. Across the full 15-year window we track, XAR has the edge at +18.14% annualized vs +7.11%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XAR has been the more volatile fund, with annualized monthly volatility of 20.4% 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 -58.8% for VYM and -46.7% for XAR. 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 0.75. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VYM charges 0.04% per year while XAR charges 0.35%. On a $10,000 position that is $4 vs $35 annually, a gap of $31 per year that compounds over a long holding period. On income, VYM currently yields 2.86% against 0.28% for XAR.
Holdings Overlap
VYM and XAR share 5 holdings out of 601 unique holdings combined, representing a 1.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XAR?
VYM has an expense ratio of 0.04% while XAR charges 0.35%. VYM is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, VYM or XAR?
Over the past year VYM returned +24.43% vs +33.85% for XAR, so XAR leads on 1-year performance. Over the longest common window we track (15 years), VYM annualized +7.11% vs +18.14% for XAR. Past performance does not guarantee future results.
Which is riskier, VYM or XAR?
XAR has been the more volatile fund at 20.4% annualized versus 14.6% for VYM. Worst drawdown: VYM -58.8% vs XAR -46.7%.
Should I hold both VYM and XAR?
VYM and XAR have a monthly-return correlation of 0.75, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VYM and XAR?
VYM and XAR share 5 common holdings with a 1.8% weight overlap. Combined, they hold 601 unique securities.
Which pays a higher dividend, VYM or XAR?
VYM yields 2.86% while XAR yields 0.28%, so VYM currently pays the higher dividend yield.
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