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ETF Comparison

VUG vs VYM: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Morningstar Growth ETF and Vanguard High Dividend Yield ETF covering yield, cost, risk, and income potential.

Updated September 30, 2026

How these figures are calculated: methodology.

Best for

  • VUGInvestors who want a growth tilt and can accept bigger swings for higher upside.
  • VYMInvestors who want higher current income (2.29% vs 0.40% for VUG).

Jump to the side-by-side numbers

Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.

VUG has outpaced VYM over the trailing twelve months, posting a 13.58% total return against 13.16%. The lead holds up over 10 years too: VUG has compounded at 18.03% a year, against 11.36% for VYM. VYM has been the steadier holding, though — annualized volatility of 12.4% against 19.7% for VUG. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
SymbolYTD cumulative1Y cumulative3Y annualized5Y annualized10Y annualizedSince Nov 2006Volatility Sharpe Sortino Max drawdown
VUG11.56%13.58%26.02%13.72%18.03%13.16%19.7%0.951.38-22.8%
VYM9.11%13.16%18.20%11.30%11.36%9.09%12.4%0.991.44-14.5%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of September 30, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Nov 2006” measures every fund from November 16, 2006 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
MetricVUGVYM
Full nameVanguard Morningstar Growth ETFVanguard High Dividend Yield ETF
IssuerVanguardVanguard
Underlying indexMorningstar US Large Cap Growth IndexFTSE High Dividend Yield Index
Last Close$90.11 as of September 30, 2026$155.20 as of September 30, 2026
Distribution rate0.40%2.29%
Trailing 12-month yield0.38%2.37%
Distribution Safety Score™ 9095
Safety-Adjusted Yield 0.36%2.18%
Expense ratio0.03%0.04%
AUM$235B$80.2B
Distribution frequencyQuarterlyQuarterly
ObjectiveSeeks to track the Morningstar US Large Cap Growth Index.Seeks to track the performance of the FTSE High Dividend Yield Index, which offers exposure to dividend-paying large-cap companies that exhibit value characteristics within the U.S. equity market. The index includes stocks with a history of paying above-average dividends.
Asset classEquityEquity
Inception date01/26/200411/10/2006
Beta1.270.66
Last dividend$0.091 payable today$0.887
Ex-dividend date09/28/202609/18/2026

Bottom lineChoose VUG if you want a growth tilt and can accept bigger swings for higher upside. Choose VYM if you want higher current income (2.29% vs 0.40% for VUG).

Model this comparison:
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Income calculator

See how much monthly income a hypothetical investment would generate in each ETF at current yields.

Vanguard
ETFs116
Total AUM$4677B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is one of the largest and most established ETF issuers, known for low-cost, broadly diversified fund offerings built on passive indexing principles. Their lineup spans multiple asset classes and strategies, including core equity and bond index funds, dividend-focused portfolios, ESG-screened options, factor-based strategies, sector exposure, target-date retirement funds, and international investments across developed and emerging markets. The platform is characterized by its emphasis on accessibility and cost efficiency across a comprehensive range of fund families, serving both individual investors seeking broad market exposure and those pursuing specific income, sustainability, or thematic objectives.

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Quick verdict

VUG (Vanguard Morningstar Growth ETF) and VYM (Vanguard High Dividend Yield ETF) are both quarterly-pay dividend ETFs, but they take different approaches.

VYM offers the higher yield at 2.29% vs 0.40% for VUG. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

VUG is cheaper with an expense ratio of 0.03% compared to 0.04%.

They have different reference exposures: VUG is linked to Morningstar US Large Cap Growth Index while VYM is linked to FTSE High Dividend Yield Index, which means their performance drivers differ.

VUG is the larger fund by assets ($235B), but assets alone do not establish trading costs or liquidity.

Who should choose each?

Choose VUG

Vanguard Morningstar Growth ETF

  • Want a growth tilt and can accept larger swings for more upside.
  • Want to keep costs low — a 0.03% expense ratio vs 0.04% for VYM.

Choose VYM

Vanguard High Dividend Yield ETF

  • Want higher current income — VYM yields 2.29% vs 0.40% for VUG.
  • Want simple, diversified core exposure as a portfolio building block.
  • Prefer lower volatility — a beta of 0.7 vs 1.3 for VUG.

Not sure? Use the income calculator and snapshot above to weigh these trade-offs against your own goals.

Deep dive

Yield & income

On a $10,000 investment, VUG would generate roughly $10.00 cash per distribution, while VYM would produce $57.25 cash per distribution, at current distribution rates. Both pay quarterly distributions.

VUG yield0.40%
VYM yield2.29%
Cash diff on $10K$47.25

Cost & efficiency

Over 10 years on $10,000, VUG would cost approximately $30 in fees vs $40 for VYM (simplified, not compounded). The $10.00 difference may be offset by yield or performance.

VUG ER0.03%
VYM ER0.04%

Strategy & risk

VUG tracks Morningstar US Large Cap Growth Index with a growth approach, while VYM tracks FTSE High Dividend Yield Index. Beta is 1.27 for VUG and 0.66 for VYM, making VYM the less volatile of the two by this measure.

VUG beta1.27
VYM beta0.66

Fund details

VUG is managed by Vanguard (launched 01/26/2004) with $235B in assets. VYM is managed by Vanguard (launched 11/10/2006) with $80.2B in assets.

VUG AUM$235B
VYM AUM$80.2B
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Frequently asked questions

What is the current distribution rate for VUG and VYM?

VUG currently distributes 0.40% and VYM 2.29%, based on fund data updated September 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.

Is VUG or VYM better for dividend income?

It depends on your goals. VYM currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between VUG and VYM?

VUG (Vanguard Morningstar Growth ETF) tracks Morningstar US Large Cap Growth Index with a growth approach, while VYM (Vanguard High Dividend Yield ETF) tracks FTSE High Dividend Yield Index. They are issued by Vanguard and Vanguard respectively.

Can I hold both VUG and VYM?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Is VUG or VYM safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — VYM scores 95, VUG scores 90, so VYM's payout currently looks the more resilient of the two. VYM has also shown lower price volatility (beta 0.66 vs 1.27 for VUG). No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, VUG or VYM?

VUG has an expense ratio of 0.03% while VYM charges 0.04%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in VUG vs VYM generate?

At current rates, $10,000 in VUG would generate roughly $10.00 cash per distribution ($40.00 annually). The same in VYM would produce about $57.25 cash per distribution ($229.00 annually).

Which has performed better historically, VUG or VYM?

VUG has outpaced VYM over the trailing twelve months, posting a 13.58% total return against 13.16%. The lead holds up over 10 years too: VUG has compounded at 18.03% a year, against 11.36% for VYM. VYM has been the steadier holding, though — annualized volatility of 12.4% against 19.7% for VUG. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

VUG vs VYM — at a glance

Generated September 26, 2026.

Overview

VUG and VYM are both large-cap equity ETFs from Vanguard, but they pursue opposite strategic objectives. VUG tracks growth-oriented companies using the Morningstar US Large Cap Growth Index, offering minimal current yield with higher potential for capital appreciation. VYM targets high-dividend-paying large-cap stocks via the FTSE High Dividend Yield Index, emphasizing current income and value-leaning characteristics. The choice between them hinges on whether you prioritize near-term distributions or long-term capital gains. This yield difference reflects underlying strategy, not fee variation; both charge 0.04% or 0.03%, nearly identical minimalist ratios.

The second difference is volatility profile. VUG carries a 1.27 beta, meaning it amplifies broad-market swings—fitting its growth-stock exposure. VYM's 0.66 beta suggests lower sensitivity to market moves, typical of dividend-focused, value-tilted holdings.

Who each is best for

VUG: Fits investors with a multi-year time horizon who can reinvest quarterly distributions and seek exposure to faster-growing large-cap companies, even if current yield is minimal.

VYM: Fits investors who need regular quarterly income from a diversified large-cap basket and are comfortable with a value tilt and lower volatility in exchange for higher current payouts.

Key risks to know

  • Sector and style concentration in growth vs. value: VUG's growth orientation carries heavier exposure to technology and communication services, while VYM's dividend and value tilt concentrates in financials and industrials. Holdings likely overlap, but their risk profiles diverge sharply during sector rotations.
  • Beta asymmetry in downturns: VUG's 1.27 beta amplifies drawdowns; a 20% market decline could produce a 25%+ drop in VUG, whereas VYM's 0.66 beta cushions the fall. Conversely, VUG outpaces in recoveries.
  • Dividend cut risk in VYM: The 2.29% yield depends on constituent companies maintaining above-average payouts. Recessions, balance-sheet deterioration, or policy shifts can trigger dividend cuts that crimp both distributions and price, as companies cutting payouts may also underperform.

Bottom line

If you want growth potential and can tolerate higher volatility in exchange for minimal current income, VUG's near-zero yield and 1.27 beta fit a longer accumulation horizon. If you prioritize steady quarterly cash flow and prefer lower swings, VYM's 2.29% yield and 0.66 beta address that goal—though you'll likely lag on total returns during strong equity rallies. Past performance does not guarantee future results; valuations, sector cycles, and dividend policies all change.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

Learn the method

The metrics behind this comparison, explained in the Academy.

Dividend growth vs. high yield Yield on cost, explained How expense ratios eat returns

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These comparisons follow the Dividend Vision methodology.