HYI vs VYM
HYI vs VYM
Western Asset High Yield Defined 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 | HYI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.96% | 0.04% | |
| AUM | $146M | $79.0B | |
| Dividend Yield | 9.89% | 2.86% | |
| Holdings | 258 | 568 | |
| YTD Return | +0.25% | +15.20% | |
| 1Y Return | -2.25% | +25.56% | |
| 3Y Return (annualized) | +6.05% | +17.86% | |
| 5Y Return (annualized) | +1.32% | +12.35% | |
| Volatility (annualized) | 12.4% | 14.6% | |
| Max Drawdown | -48.5% | -58.8% | |
| Fund Family | Franklin Templeton Investments (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 27, 2010 | Nov 10, 2006 |
HYI vs VYM Performance
Western Asset High Yield Defined Opportunity Fund Inc. (HYI) 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 HYI returned -2.25% while VYM returned +25.56%. Year to date, HYI is up 0.25% versus a gain of 15.20% for VYM.
Over three years, HYI compounded at +6.05% per year against +17.86% for VYM; over five years the annualized figures are +1.32% and +12.35% respectively. Across the full 16-year window we track, VYM has the edge at +7.05% annualized vs -0.86%. 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 12.4% for HYI. 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 -48.5% for HYI 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
HYI charges 0.96% per year while VYM charges 0.04%. On a $10,000 position that is $96 vs $4 annually, a gap of $92 per year that compounds over a long holding period. On income, HYI currently yields 9.89% against 2.86% for VYM.
Holdings Overlap
HYI and VYM share 0 holdings out of 749 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, HYI or VYM?
HYI has an expense ratio of 0.96% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $92 per year of difference.
Which performed better, HYI or VYM?
Over the past year HYI returned -2.25% vs +25.56% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (16 years), HYI annualized -0.86% vs +7.05% for VYM. Past performance does not guarantee future results.
Which is riskier, HYI or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 12.4% for HYI. Worst drawdown: HYI -48.5% vs VYM -58.8%.
Should I hold both HYI and VYM?
HYI 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 HYI and VYM?
HYI and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 749 unique securities.
Which pays a higher dividend, HYI or VYM?
HYI yields 9.89% while VYM yields 2.86%, so HYI currently pays the higher dividend yield.
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