ARDC vs VYM
ARDC vs VYM
Ares Dynamic Credit Allocation Fund Inc. vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | ARDC | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 3.69% | 0.04% | |
| AUM | $320M | $79.0B | |
| Dividend Yield | 10.05% | 2.86% | |
| Holdings | 316 | 568 | |
| YTD Return | -0.65% | +15.80% | |
| 1Y Return | -4.15% | +26.12% | |
| 3Y Return (annualized) | +9.49% | +18.25% | |
| 5Y Return (annualized) | +4.55% | +12.51% | |
| Volatility (annualized) | 13.5% | 14.6% | |
| Max Drawdown | -57.1% | -58.8% | |
| Fund Family | Ares Public Funds | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 27, 2012 | Nov 10, 2006 |
ARDC vs VYM Performance
Ares Dynamic Credit Allocation Fund Inc. (ARDC) is a ETF from Ares Public Funds and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year ARDC returned -4.15% while VYM returned +26.12%. Year to date, ARDC is down 0.65% versus a gain of 15.80% for VYM.
Over three years, ARDC compounded at +9.49% per year against +18.25% for VYM; over five years the annualized figures are +4.55% and +12.51% respectively. Across the full 14-year window we track, VYM has the edge at +7.07% annualized vs +0.35%. 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 13.5% for ARDC. 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 -57.1% for ARDC 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 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
ARDC charges 3.69% per year while VYM charges 0.04%. On a $10,000 position that is $369 vs $4 annually, a gap of $365 per year that compounds over a long holding period. On income, ARDC currently yields 10.05% against 2.86% for VYM.
Holdings Overlap
ARDC and VYM share 0 holdings out of 658 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, ARDC or VYM?
ARDC has an expense ratio of 3.69% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $365 per year of difference.
Which performed better, ARDC or VYM?
Over the past year ARDC returned -4.15% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (14 years), ARDC annualized +0.35% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, ARDC or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 13.5% for ARDC. Worst drawdown: ARDC -57.1% vs VYM -58.8%.
Should I hold both ARDC and VYM?
ARDC and VYM have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between ARDC and VYM?
ARDC and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 658 unique securities.
Which pays a higher dividend, ARDC or VYM?
ARDC yields 10.05% while VYM yields 2.86%, so ARDC currently pays the higher dividend yield.
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