FMY vs VYM
FMY vs VYM
First Trust Mortgage Income Fund 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 | FMY | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 1.35% | 0.04% | |
| AUM | $52M | $79.0B | |
| Dividend Yield | 6.29% | 2.86% | |
| Holdings | 166 | 568 | |
| YTD Return | -0.30% | +13.24% | |
| 1Y Return | +1.19% | +23.76% | |
| 3Y Return (annualized) | +8.05% | +16.97% | |
| 5Y Return (annualized) | +2.91% | +12.26% | |
| Volatility (annualized) | 8.9% | 14.6% | |
| Max Drawdown | -47.3% | -58.8% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | May 25, 2005 | Nov 10, 2006 |
FMY vs VYM Performance
First Trust Mortgage Income Fund (FMY) is a ETF from First Trust Portfolios (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year FMY returned +1.19% while VYM returned +23.76%. Year to date, FMY is down 0.30% versus a gain of 13.24% for VYM.
Over three years, FMY compounded at +8.05% per year against +16.97% for VYM; over five years the annualized figures are +2.91% and +12.26% respectively. Across the full 20-year window we track, VYM has the edge at +6.96% annualized vs -0.90%. 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 8.9% for FMY. 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 -47.3% for FMY 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 0.41. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FMY charges 1.35% per year while VYM charges 0.04%. On a $10,000 position that is $135 vs $4 annually, a gap of $131 per year that compounds over a long holding period. On income, FMY currently yields 6.29% against 2.86% for VYM.
Holdings Overlap
FMY and VYM share 0 holdings out of 587 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, FMY or VYM?
FMY has an expense ratio of 1.35% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $131 per year of difference.
Which performed better, FMY or VYM?
Over the past year FMY returned +1.19% vs +23.76% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), FMY annualized -0.90% vs +6.96% for VYM. Past performance does not guarantee future results.
Which is riskier, FMY or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 8.9% for FMY. Worst drawdown: FMY -47.3% vs VYM -58.8%.
Should I hold both FMY and VYM?
FMY and VYM have a monthly-return correlation of 0.41, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FMY and VYM?
FMY and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 587 unique securities.
Which pays a higher dividend, FMY or VYM?
FMY yields 6.29% while VYM yields 2.86%, so FMY currently pays the higher dividend yield.
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