HIO vs VYM
HIO vs VYM
Western Asset High Income Opportunity 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 | HIO | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.94% | 0.04% | |
| AUM | $365M | $79.0B | |
| Dividend Yield | 10.92% | 2.86% | |
| Holdings | 338 | 568 | |
| YTD Return | +3.25% | +15.45% | |
| 1Y Return | +1.01% | +26.05% | |
| 3Y Return (annualized) | +8.87% | +17.96% | |
| 5Y Return (annualized) | +2.26% | +12.54% | |
| Volatility (annualized) | 13.4% | 14.6% | |
| Max Drawdown | -76.3% | -58.8% | |
| Fund Family | Franklin Templeton Investments (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 22, 1993 | Nov 10, 2006 |
HIO vs VYM Performance
Western Asset High Income Opportunity Fund Inc. (HIO) is a ETF from Franklin Templeton Investments (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year HIO returned +1.01% while VYM returned +26.05%. Year to date, HIO is up 3.25% versus a gain of 15.45% for VYM.
Over three years, HIO compounded at +8.87% per year against +17.96% for VYM; over five years the annualized figures are +2.26% and +12.54% respectively. Across the full 20-year window we track, VYM has the edge at +7.06% annualized vs -2.03%. 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 13.4% for HIO. 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 -76.3% for HIO 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 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HIO charges 0.94% per year while VYM charges 0.04%. On a $10,000 position that is $94 vs $4 annually, a gap of $90 per year that compounds over a long holding period. On income, HIO currently yields 10.92% against 2.86% for VYM.
Holdings Overlap
HIO and VYM share 0 holdings out of 771 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, HIO or VYM?
HIO has an expense ratio of 0.94% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $90 per year of difference.
Which performed better, HIO or VYM?
Over the past year HIO returned +1.01% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), HIO annualized -2.03% vs +7.06% for VYM. Past performance does not guarantee future results.
Which is riskier, HIO or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 13.4% for HIO. Worst drawdown: HIO -76.3% vs VYM -58.8%.
Should I hold both HIO and VYM?
HIO and VYM have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HIO and VYM?
HIO and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 771 unique securities.
Which pays a higher dividend, HIO or VYM?
HIO yields 10.92% while VYM yields 2.86%, so HIO currently pays the higher dividend yield.
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