VYM vs XHE
Vanguard High Dividend Yield ETF vs State Street SPDR S&P Health Care Equipment ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 568 holdings.
Side-by-Side Comparison
| Metric | VYM | XHE | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.35% | |
| AUM | $79.0B | $155M | |
| Dividend Yield | 2.86% | 0.06% | |
| Holdings | 568 | 69 | |
| YTD Return | +16.78% | +8.93% | |
| 1Y Return | +24.43% | +17.53% | |
| 3Y Return (annualized) | +18.60% | +2.06% | |
| 5Y Return (annualized) | +12.30% | -5.00% | |
| Volatility (annualized) | 14.6% | 18.8% | |
| Max Drawdown | -58.8% | -49.9% | |
| Fund Family | Vanguard (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Jan 26, 2011 |
VYM vs XHE Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and State Street SPDR S&P Health Care Equipment ETF (XHE) is a ETF from State Street Investment Management. Over the past year VYM returned +24.43% while XHE returned +17.53%. Year to date, VYM is up 16.78% versus a gain of 8.93% for XHE.
Over three years, VYM compounded at +18.60% per year against +2.06% for XHE; over five years the annualized figures are +12.30% and -5.00% respectively. Across the full 16-year window we track, XHE has the edge at +9.87% annualized vs +7.11%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XHE has been the more volatile fund, with annualized monthly volatility of 18.8% 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 -49.9% for XHE. 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 0.65. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VYM charges 0.04% per year while XHE 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 0.06% for XHE.
Holdings Overlap
VYM and XHE share 5 holdings out of 622 unique holdings combined, representing a 1.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XHE?
VYM has an expense ratio of 0.04% while XHE 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 XHE?
Over the past year VYM returned +24.43% vs +17.53% for XHE, so VYM leads on 1-year performance. Over the longest common window we track (16 years), VYM annualized +7.11% vs +9.87% for XHE. Past performance does not guarantee future results.
Which is riskier, VYM or XHE?
XHE has been the more volatile fund at 18.8% annualized versus 14.6% for VYM. Worst drawdown: VYM -58.8% vs XHE -49.9%.
Should I hold both VYM and XHE?
VYM and XHE have a monthly-return correlation of 0.65, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VYM and XHE?
VYM and XHE share 5 common holdings with a 1.7% weight overlap. Combined, they hold 622 unique securities.
Which pays a higher dividend, VYM or XHE?
VYM yields 2.86% while XHE yields 0.06%, so VYM currently pays the higher dividend yield.
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