MBS vs VYM

Quick Verdict

VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.

Lower Fees: VYMHigher Returns: VYMMore Diversified: VYM

Side-by-Side Comparison

MetricMBSVYMWinner
Expense Ratio0.49%0.04%
AUM$148M$79.0B
Dividend Yield5.12%2.86%
Holdings126568
YTD Return+0.32%+15.80%
1Y Return+3.95%+26.12%
3Y Return (annualized)-+18.25%
5Y Return (annualized)-+12.51%
Volatility (annualized)4.6%14.6%
Max Drawdown-4.1%-58.8%
Fund FamilyAngel Oak Capital AdvisorsVanguard (US)
CategoryFixed IncomeEquity
InceptionFeb 20, 2024Nov 10, 2006

MBS vs VYM Performance

Angel Oak Mortgage-Backed Securities ETF (MBS) is a ETF from Angel Oak Capital Advisors and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year MBS returned +3.95% while VYM returned +26.12%. Year to date, MBS is up 0.32% versus a gain of 15.80% for VYM.

Risk: Volatility and Drawdowns

VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 4.6% for MBS. 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 -4.1% for MBS 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 0.47. They move independently enough that combining them can meaningfully diversify a portfolio.

Fees and Cost Over Time

MBS charges 0.49% per year while VYM charges 0.04%. On a $10,000 position that is $49 vs $4 annually, a gap of $45 per year that compounds over a long holding period. On income, MBS currently yields 5.12% against 2.86% for VYM.

Holdings Overlap

0.0%overlap

MBS and VYM share 0 holdings out of 576 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, MBS or VYM?

MBS has an expense ratio of 0.49% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $45 per year of difference.

Which performed better, MBS or VYM?

Over the past year MBS returned +3.95% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (3 years), MBS annualized +5.73% vs +7.07% for VYM. Past performance does not guarantee future results.

Which is riskier, MBS or VYM?

VYM has been the more volatile fund at 14.6% annualized versus 4.6% for MBS. Worst drawdown: MBS -4.1% vs VYM -58.8%.

Should I hold both MBS and VYM?

MBS and VYM have a monthly-return correlation of 0.47, so combining them can provide real diversification depending on your allocation goals.

What is the holdings overlap between MBS and VYM?

MBS and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 576 unique securities.

Which pays a higher dividend, MBS or VYM?

MBS yields 5.12% while VYM yields 2.86%, so MBS currently pays the higher dividend yield.

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