VYM vs. DIA: What’s The Difference?

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VYM is a Vanguard Large Value fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VYM and DIA? And which fund is better?

The expense ratio of VYM is 0.10 percentage points lower than DIA’s (0.06% vs. 0.16%). VYM also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VYM has provided lower returns than DIA over the past ten years.

In this article, we’ll compare VYM vs. DIA. We’ll look at industry exposure and performance, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss VYM’s and DIA’s holdings, portfolio growth, and fund composition and examine how these affect their overall returns.

Summary

VYM DIA
Name Vanguard High Dividend Yield Index Fund ETF Shares SPDR Dow Jones Industrial Average ETF Trust
Category Large Value Large Value
Issuer Vanguard SPDR State Street Global Advisors
AUM 48.5B 30.46B
Avg. Return 12.20% 13.35%
Div. Yield 2.79% 1.61%
Expense Ratio 0.06% 0.16%

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) is a Large Value fund that is issued by Vanguard. It currently has 48.5B total assets under management and has yielded an average annual return of 12.20% over the past 10 years. The fund has a dividend yield of 2.79% with an expense ratio of 0.06%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

VYM’s dividend yield is 1.18% higher than that of DIA (2.79% vs. 1.61%). Also, VYM yielded on average 1.16% less per year over the past decade (12.20% vs. 13.35%). The expense ratio of VYM is 0.10 percentage points lower than DIA’s (0.06% vs. 0.16%).

Fund Composition

Industry Exposure

VYM vs. DIA - Industry Exposure

VYM DIA
Technology 9.77% 17.32%
Industrials 10.14% 16.7%
Energy 7.12% 2.0%
Communication Services 5.91% 4.42%
Utilities 7.27% 0.0%
Healthcare 13.61% 17.92%
Consumer Defensive 14.13% 6.3%
Real Estate 0.02% 0.0%
Financial Services 22.05% 20.68%
Consumer Cyclical 5.57% 13.44%
Basic Materials 4.41% 1.21%

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has the most exposure to the Financial Services sector at 22.05%. This is followed by Consumer Defensive and Healthcare at 14.13% and 13.61% respectively. Basic Materials (4.41%), Consumer Cyclical (5.57%), and Communication Services (5.91%) only make up 15.89% of the fund’s total assets.

VYM’s mid-section with moderate exposure is comprised of Energy, Utilities, Technology, Industrials, and Healthcare stocks at 7.12%, 7.27%, 9.77%, 10.14%, and 13.61%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

VYM is 1.37% more exposed to the Financial Services sector than DIA (22.05% vs 20.68%). VYM’s exposure to Consumer Defensive and Healthcare stocks is 7.83% higher and 4.31% lower respectively (14.13% vs. 6.3% and 13.61% vs. 17.92%). In total, Basic Materials, Consumer Cyclical, and Communication Services also make up 3.18% less of the fund’s holdings compared to DIA (15.89% vs. 19.07%).

Holdings

VYM - Holdings

VYM Holdings Weight
JPMorgan Chase & Co 3.53%
Johnson & Johnson 3.28%
The Home Depot Inc 2.59%
Procter & Gamble Co 2.48%
Bank of America Corp 2.35%
Exxon Mobil Corp 2.02%
Comcast Corp Class A 1.96%
Verizon Communications Inc 1.75%
Intel Corp 1.71%
Cisco Systems Inc 1.69%

VYM’s Top Holdings are JPMorgan Chase & Co, Johnson & Johnson, The Home Depot Inc, Procter & Gamble Co, and Bank of America Corp at 3.53%, 3.28%, 2.59%, 2.48%, and 2.35%.

Exxon Mobil Corp (2.02%), Comcast Corp Class A (1.96%), and Verizon Communications Inc (1.75%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the VYM’s holdings at 1.71% and 1.69%.

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

Risk Analysis

VYM DIA
Mean Return 1.04 1.13
R-squared 88.88 93.31
Std. Deviation 12.69 13.68
Alpha -0.7 -0.94
Beta 0.88 0.97
Sharpe Ratio 0.93 0.94
Treynor Ratio 13.24 13.07

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has a Treynor Ratio of 13.24 with a Sharpe Ratio of 0.93 and a R-squared of 88.88. Its Alpha is -0.7 while VYM’s Mean Return is 1.04. Furthermore, the fund has a Standard Deviation of 12.69 and a Beta of 0.88.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Sharpe Ratio of 0.94 with a R-squared of 93.31 and a Standard Deviation of 13.68. Its Mean Return is 1.13 while DIA’s Alpha is -0.94. Furthermore, the fund has a Treynor Ratio of 13.07 and a Beta of 0.97.

VYM’s Mean Return is 0.09 points lower than that of DIA and its R-squared is 4.43 points lower. With a Standard Deviation of 12.69, VYM is slightly less volatile than DIA. The Alpha and Beta of VYM are 0.24 points higher and 0.09 points lower than DIA’s Alpha and Beta.

Performance

Annual Returns

VYM vs. DIA - Annual Returns

Year VYM DIA
2020 1.14% 9.63%
2019 24.2% 25.09%
2018 -5.87% -3.6%
2017 16.42% 27.97%
2016 16.87% 16.28%
2015 0.33% 0.1%
2014 13.47% 9.88%
2013 30.26% 29.41%
2012 12.68% 10.04%
2011 10.5% 8.21%
2010 14.17% 13.87%

VYM had its best year in 2013 with an annual return of 30.26%. VYM’s worst year over the past decade yielded -5.87% and occurred in 2018. In most years the Vanguard High Dividend Yield Index Fund ETF Shares provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 12.68%, 13.47%, and 14.17% respectively.

The year 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.

Portfolio Growth

VYM vs. DIA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VYM $10,000 $33,914 12.20%
DIA $10,000 $37,965 13.35%

A $10,000 investment in VYM would have resulted in a final balance of $33,914. This is a profit of $23,914 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.20%.

With a $10,000 investment in DIA, the end total would have been $37,965. This equates to a $27,965 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.

VYM’s CAGR is 1.16 percentage points lower than that of DIA and as a result, would have yielded $4,051 less on a $10,000 investment. Thus, VYM performed worse than DIA by 1.16% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply