VGMS vs VYM
VGMS vs VYM
Vanguard Multi-Sector Income Bond ETF 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 | VGMS | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.30% | 0.04% | |
| AUM | $235M | $79.0B | |
| Dividend Yield | 5.14% | 2.86% | |
| Holdings | 927 | 568 | |
| YTD Return | -1.54% | +13.24% | |
| 1Y Return | +2.46% | +23.76% | |
| 3Y Return (annualized) | - | +16.97% | |
| 5Y Return (annualized) | - | +12.26% | |
| Volatility (annualized) | 2.9% | 14.6% | |
| Max Drawdown | -2.9% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jun 9, 2025 | Nov 10, 2006 |
VGMS vs VYM Performance
Vanguard Multi-Sector Income Bond ETF (VGMS) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VGMS returned +2.46% while VYM returned +23.76%. Year to date, VGMS is down 1.54% versus a gain of 13.24% for VYM.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 2.9% for VGMS. 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 -2.9% for VGMS 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 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VGMS charges 0.30% per year while VYM charges 0.04%. On a $10,000 position that is $30 vs $4 annually, a gap of $26 per year that compounds over a long holding period. On income, VGMS currently yields 5.14% against 2.86% for VYM.
Holdings Overlap
VGMS and VYM share 0 holdings out of 1092 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, VGMS or VYM?
VGMS has an expense ratio of 0.30% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $26 per year of difference.
Which performed better, VGMS or VYM?
Over the past year VGMS returned +2.46% vs +23.76% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (1 years), VGMS annualized +3.65% vs +6.96% for VYM. Past performance does not guarantee future results.
Which is riskier, VGMS or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.9% for VGMS. Worst drawdown: VGMS -2.9% vs VYM -58.8%.
Should I hold both VGMS and VYM?
VGMS and VYM have a monthly-return correlation of 0.70, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGMS and VYM?
VGMS and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1092 unique securities.
Which pays a higher dividend, VGMS or VYM?
VGMS yields 5.14% while VYM yields 2.86%, so VGMS currently pays the higher dividend yield.
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