VYM vs XLY
Vanguard High Dividend Yield ETF vs State Street Consumer Discretionary Select Sector SPDR ETF
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 | XLY | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $81.6B | $23.5B | |
| Dividend Yield | 2.24% | 0.78% | |
| Holdings | 616 | 50 | |
| YTD Return | +15.60% | +0.60% | |
| 1Y Return | +23.48% | +3.99% | |
| 3Y Return (annualized) | +19.07% | +13.91% | |
| 5Y Return (annualized) | +12.50% | +7.04% | |
| Volatility (annualized) | 14.6% | 19.2% | |
| Max Drawdown | -58.8% | -60.1% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Dec 16, 1998 |
VYM vs XLY Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and State Street Consumer Discretionary Select Sector SPDR ETF (XLY) is a ETF from SPDR State Street Global Advisors. Over the past year VYM returned +23.48% while XLY returned +3.99%. Year to date, VYM is up 15.60% versus a gain of 0.60% for XLY.
Over three years, VYM compounded at +19.07% per year against +13.91% for XLY; over five years the annualized figures are +12.50% and +7.04% respectively. Across the full 20-year window we track, XLY has the edge at +8.58% annualized vs +7.05%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLY has been the more volatile fund, with annualized monthly volatility of 19.2% 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 -60.1% for XLY. 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 0.79. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VYM charges 0.04% per year while XLY charges 0.08%. On a $10,000 position that is $4 vs $8 annually, a gap of $4 per year that compounds over a long holding period. On income, VYM currently yields 2.24% against 0.78% for XLY.
Holdings Overlap
VYM and XLY share 21 holdings out of 630 unique holdings combined, representing a 5.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XLY?
VYM has an expense ratio of 0.04% while XLY charges 0.08%. VYM is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VYM or XLY?
Over the past year VYM returned +23.48% vs +3.99% for XLY, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VYM annualized +7.05% vs +8.58% for XLY. Past performance does not guarantee future results.
Which is riskier, VYM or XLY?
XLY has been the more volatile fund at 19.2% annualized versus 14.6% for VYM. Worst drawdown: VYM -58.8% vs XLY -60.1%.
Should I hold both VYM and XLY?
VYM and XLY have a monthly-return correlation of 0.79, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VYM and XLY?
VYM and XLY share 21 common holdings with a 5.2% weight overlap. Combined, they hold 630 unique securities.
Which pays a higher dividend, VYM or XLY?
VYM yields 2.24% while XLY yields 0.78%, so VYM currently pays the higher dividend yield.
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