SPY vs VYM: SPDR S&P 500 ETF Trust vs Vanguard High Dividend Yield ETF Comparison
Compare SPY (SPDR S&P 500 ETF Trust) and VYM (Vanguard High Dividend Yield ETF) by expense ratio, dividend yield, holdings, and more.
Key Differences
- 1Expense ratio: VYM 0.06% vs SPY 0.0945% (VYM is 0.03%p cheaper)
- 2Dividend yield: VYM 2.75% vs SPY 1.26%
- 3Category: SPY is Index Tracking, VYM is Dividend ETFs
- 4Holdings: SPY 503 vs VYM 537
- 5Issuer: SPY (State Street(SPDR)) vs VYM (Vanguard)
Conclusion
VYM has an overall advantage with lower expense ratio (0.06% vs 0.0945%), higher dividend yield (2.75% vs 1.26%). However, SPY also offers Total US market exposure, making it worth considering depending on your portfolio goals.
| Category | SPY | VYM |
|---|---|---|
| Fund Name | SPDR S&P 500 ETF Trust | Vanguard High Dividend Yield ETF |
| Current Price | ... | ... |
| Category | Index Tracking | Dividend ETFs |
| Expense Ratio | 0.0945% | 0.06% |
| Dividend Yield | 1.26% | 2.75% |
| Holdings | 503 | 537 |
SPY Top Holdings
- 1. Apple
- 2. Microsoft
- 3. Amazon
- 4. Nvidia
- 5. Alphabet
VYM Top Holdings
- 1. Broadcom
- 2. JPMorgan
- 3. Exxon Mobil
- 4. Procter & Gamble
SPY Features
- •Tracks the S&P 500
- •Highest liquidity
- •Market representativeness
- •Long-established ETF
VYM Features
- •High dividend
- •Large-cap stocks
- •Diversified investment
- •Low expense ratio
Pros & Cons
SPY
Advantages
- ✓ Total US market exposure
- ✓ Very high liquidity
- ✓ Stable management
Disadvantages
- ⚠ Market risk
- ⚠ Large-cap concentration
- ⚠ Potential growth slowdown
VYM
Advantages
- ✓ High dividend income
- ✓ Stable companies
- ✓ Low volatility
Disadvantages
- ⚠ Limited growth potential
- ⚠ Interest rate sensitive
- ⚠ Sector bias
Investment Strategy
Best For: SPY
Use as core asset; maintain 30-50% portfolio allocation
Best For: VYM
Suitable for income investors; diversify with SCHD
Detailed Analysis
SPY (SPDR S&P 500 ETF Trust) and VYM (Vanguard High Dividend Yield ETF) They belong to different categories — Index Tracking and Dividend ETFs — representing distinct investment areas. SPY: SPDR S&P 500 ETF Trust (SPY) is an exchange-traded fund that provides investors with exposure to broad market indices. It carries an expense ratio of 0.09%. The fund offers a dividend yield of approximately 1.26%. The portfolio holds 503 securities. With an expense ratio of 0.0945% and dividend yield of 1.26%, its top holdings include Apple, Microsoft, Amazon. Key features include Tracks the S&P 500, Highest liquidity, with Total US market exposure being a major advantage. VYM: Vanguard High Dividend Yield ETF (VYM) is an exchange-traded fund that provides investors with exposure to dividend-paying equities. It carries an expense ratio of 0.06%. The fund offers a dividend yield of approximately 2.75%. The portfolio holds 537 securities. With an expense ratio of 0.06% and dividend yield of 2.75%, top holdings include Broadcom, JPMorgan, Exxon Mobil. Notable features are High dividend, Large-cap stocks, with High dividend income as a core strength. In terms of expense ratio, VYM is 0.03%p cheaper, which can lead to significant cost savings through compounding over long-term investment. Over 20 years with a $100,000 investment, this difference can amount to thousands of dollars.
Investment Recommendation
SPY is suitable for Use as core asset; maintain 30-50% portfolio allocation, while VYM is suitable for Suitable for income investors; diversify with SCHD. Since they are in different categories, holding both can provide portfolio diversification benefits. Adjust the allocation based on your risk tolerance and investment horizon. For beginners, we recommend a core-satellite strategy: choose a low-cost, well-diversified ETF as your core holding, and allocate the rest to satellite positions.
Key Summary
Both SPY and VYM are excellent ETFs for their respective investment objectives. The key is to choose based on your investment goals, time horizon, and risk tolerance. Rather than focusing on a single metric (dividend yield, fees, etc.), evaluate from a holistic portfolio perspective. Use our rebalancing calculator to easily determine the optimal asset allocation including both ETFs.
SPY vs VYM Investment Guide
Both SPY and VYM are popular US ETFs, but they differ in investment strategy and portfolio role. SPY has an expense ratio of 0.0945%, while VYM charges 0.06%, giving VYM a cost advantage. In terms of dividend yield, SPY offers 1.26% while VYM offers 2.75%, making VYM the better choice for income investors.
When choosing between the two, consider your investment goals, time horizon, and risk tolerance. If long-term growth is your priority, favor the ETF with lower fees and broader diversification. If you need steady cash flow, the higher-yielding ETF may be more suitable. You can also hold both in your portfolio for a complementary approach.
Regardless of which ETF you choose, maintaining your target allocation through regular rebalancing is key to long-term performance. Review your portfolio quarterly or semi-annually, and adjust if weights have drifted significantly. Our rebalancing calculator can automatically determine the buy/sell quantities for each holding.
5 Things to Check When Comparing ETFs
Expense Ratio: Even a 0.1% difference in fees can translate to thousands of dollars over long-term investing. When two ETFs track a similar index, the lower-cost option has the edge.
Tracking Index & Holdings: Even ETFs in the same category may track different indices. Review the top holdings and sector weights to find the best fit for your investment goals.
Dividend Policy: Compare dividend frequency (monthly vs quarterly), yield, and dividend growth rate. Monthly dividend ETFs may be preferable if you need regular cash flow.
Trading Volume & Liquidity: Sufficient daily trading volume ensures you can buy and sell at fair prices. Low-volume ETFs may have wider bid-ask spreads, increasing your trading costs.
Portfolio Role: Determine whether the ETF serves as a core or satellite holding in your portfolio, and size your position accordingly.