VOO vs VYM: Side-by-Side ETF Comparison

VOO vs VYM comes down to growth versus income: VOO tracks the S&P 500 with a 1.13% yield and heavy 35% tech weighting, while VYM focuses on higher-dividend stocks yielding 2.44% with more financials (22%) and a lower 16.3 P/E ratio. Both posted similar one-year returns around 14%, but VYM costs twice as much at 0.06% annually.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

Vanguard offers both funds, but they serve different purposes. VOO simply tracks the S&P 500, giving you the market's return at rock-bottom cost - just 0.03% annually. The fund weights each stock by market cap, so Apple, Microsoft and other giants dominate. With technology making up 35% of the portfolio, you're essentially betting on big tech's continued dominance.

VYM takes a different path, screening for companies that pay above-average dividends. The result is a portfolio yielding 2.44% - more than double VOO's 1.13%. You'll find more banks and insurance companies here (22% vs 13% in VOO) and less technology exposure. The fund trades at 16.3 times earnings versus VOO's 22.4, reflecting its tilt toward cheaper, more mature businesses. Both charge minimal fees and use the same indexing approach, but VYM costs twice as much at 0.06%.

Annual & Cumulative Returns

VOQ's growth edge is hard to miss: the fund's 15.7 percent annual gain over the past decade beats VYM's 12.3 percent by more than three percentage points a year, and the gap widens to almost eight points over the last three years. That difference, repeated for ten years, turns a $10,000 stake into roughly $42,800 for VOO versus $31,700 for VYM. The trade-off is income: VYM's 2.4 percent yield is double VOO's 1.1 percent, so investors who spent the dividends instead of reinvesting them saw the shortfall shrink to about 2.3 percent a year.

What the numbers don't show is temperament. VYM has lagged in every period except 2024's first quarter, yet its lower 16.3 P/E suggests it holds up better when growth stocks sell off. If you need cash now or want a smoother ride, the higher dividend helps. If you're building a portfolio you won't touch for years, the compounding power of VOO's extra three-percentage-point annual return is tough to ignore.

Risk Metrics

VYM's lower 1-year volatility of 9.32% versus VOO's 10.99% reflects its dividend-focused approach, which tends to cushion price swings during market turbulence. The gap narrows over three years, with VYM at 11.48% versus VOO's 11.96%, suggesting this smoothing effect becomes less pronounced over longer periods. What's striking is the Sharpe ratio difference: VOO's 1.4 is nearly double VYM's 0.71, meaning investors received significantly more return per unit of risk with the S&P 500 tracker.

For investors weighing these options, the numbers tell a clear story about risk-reward trade-offs. VYM offers modestly lower volatility, particularly in shorter timeframes, but this comes at the cost of risk-adjusted performance. The higher Sharpe ratio for VOO suggests that despite slightly more volatility, the additional risk has been better compensated. Your choice depends on whether you prioritize stability of returns (VYM) or optimal risk-adjusted growth (VOO).

Dividend Yield & Growth

VYM's 2.44% yield is more than double VOO's 1.13%, which translates to roughly $244 versus $113 in annual dividend income on a $10,000 investment. That gap exists because VYM specifically targets companies with above-average dividend payouts, while VOO simply owns the broader S&P 500 regardless of dividend policy.

The trade-off becomes clear when you look at total returns. VOO's 14.43% one-year performance beat VYM's 13.95% despite the lower yield, showing how high-dividend stocks often lag during strong market periods. Neither ETF offers monthly income - both pay quarterly like most Vanguard funds, so the yield difference is what really matters for income-focused investors.

Fees & Liquidity

VOO's 0.03% expense ratio means you pay just 30 cents annually per $1,000 invested, making it one of the cheapest ways to own the S&P 500. VYM costs twice as much at 0.06%, which still works out to only 60 cents per grand - hardly a deal-breaker, but the difference compounds over decades. Both trade millions of shares daily with tight bid-ask spreads, so you're not getting nickeled and dimed on entry or exit.

The fee gap matters more if you're investing large sums or holding for the very long term. On a $100,000 position over 20 years, that 0.03% difference adds up to about $1,200 in extra costs with VYM, assuming identical returns. Still, both ETFs cost far less than the average mutual fund, and either one beats paying an advisor 1% to pick individual stocks.

ETF Composition: Asset Classes

Both ETFs stick almost entirely to U.S. equities VOO parks 99.1% of its assets in domestic stocks while VYM holds 98.1%. The sliver left over is sprinkled into non-U.S. names (about half a percent for VOO, closer to 1.7% for VYM), a cash drag under 0.25%, and trace “other” positions that barely move the needle. In practical terms, neither fund gives you meaningful foreign exposure, so currency risk or overseas economic surprises won’t budge the portfolio much.

The tiny gap in domestic weight actually tilts the dividend story. VYM’s extra 1% allocated outside the U.S. comes from large overseas dividend payers that qualify for its yield screen, nudging the fund’s cash component slightly lower (0.12% vs 0.22%). For income-focused investors, that means a bit more of every dollar is working in equities, helping prop up the 2.4% yield without adding any noticeable international volatility. VOO holders, meanwhile, keep an extra 0.1% in cash minuscule, but enough to blunt a hair of upside in raging bull markets.

Regional Allocation

Both ETFs stick almost entirely to North American stocks, but the numbers reveal some interesting differences in how they treat international exposure. VOO keeps 99.5% of its holdings in North America, leaving just half a percent for companies based elsewhere. VYM casts a slightly wider net with 98.3% in North America, meaning it holds roughly three times more international exposure than VOO. That extra 1.2% might seem small, but it adds up when you're dealing with billions in assets.

The geographic spread tells a story about dividend hunting versus pure index tracking. VYM's international allocations show up in places you'd expect higher-yielding stocks - developed Europe gets 0.97% versus VOO's 0.38%, and the UK allocation jumps to 0.18% from VOO's barely-there 0.03%. These aren't massive differences, but they reflect how dividend-focused strategies naturally tilt toward markets with established dividend cultures. For investors, this means VYM offers a touch more geographic diversification, though both funds remain overwhelmingly US-focused at their core.

Sector Weights

VOO's sector mix mirrors the S&P 500's tech-heavy tilt, with more than a third of assets parked in technology stocks. That's nearly double VYM's 16.7% allocation, and the gap widens further in communications - VOO carries 10.9% versus VYM's modest 2.5%. This concentration explains much of the performance difference investors see between these funds, particularly during tech rallies when growth stocks lead markets.

The dividend-focused VYM tilts toward value sectors that actually pay meaningful yields. Financial services dominates at 22.1%, nearly double VOO's 13.0% weighting, while energy gets an 8.4% allocation compared to VOO's 2.8%. Consumer staples, utilities, and healthcare also get bigger slices in VYM, creating a more defensive posture that tends to hold up better when markets turn south. For investors choosing between them, it's really a question of whether you want the market's growth engine or its income generators.

Top 10 Holdings

VOO's top five holdings read like a who's who of mega-cap growth stocks, with NVIDIA claiming the top spot at 7.75% followed closely by Apple at 6.87%. These five companies alone account for roughly 28% of the entire fund, showing how the S&P 500's market-cap weighting creates heavy concentration in the biggest names. The dominance of tech giants isn't just a footnote here - it's the main story, with these companies driving both the fund's performance and its relatively high P/E ratio of 22.4.

VYM takes a completely different approach, as its largest holding Broadcom at 7.57% suggests a tilt toward established dividend payers rather than pure growth plays. You'll notice JPMorgan Chase and Exxon Mobil in the top five, reflecting the fund's preference for companies with strong cash flows that can sustain above-average dividends. The weightings are more evenly distributed too - no single position dominates like in VOO, which helps explain why VYM trades at a more modest 16.3 P/E ratio while offering that attractive 2.44% yield.

Valuation & Growth Metrics

VOO trades at 22.4 times earnings and 4.6 times book value, a clear premium to VYM’s 16.3 and 2.7 multiples. That gap mirrors the portfolios: the S&P 500 fund is loaded with tech names whose future cash flows get priced at a steeper multiple, while VYM’s dividend screen tilts it toward banks, consumer staples, and utilities that the market treats as slower-growth bond proxies.

The growth column shows what you’re paying for. VOO’s holdings have delivered 10.2 % annual earnings growth over the past five years and are projected to keep compounding at about 10.5 %; revenue has climbed 8 %. VYM’s earnings history is a much tamer 2.8 %, with forward expectations just under 9 % and sales growth barely above 5 %. In short, VOO’s higher valuation buys demonstrably faster expansion, while VYM’s lower price tags and higher 2.4 % yield offer a value tilt that tends to hold up better when multiples compress.

Which ETF Fits Your Portfolio?

Your choice comes down to what you want from your large-cap U.S. exposure. VOO gives you the full S&P 500 at half the cost (0.03% vs 0.06%) and rode the 2024 tech surge to a 14.4% one-year return, but you'll live with a slim 1.1% dividend. VYM swaps some of that growth for cash in hand: its 2.4% yield is double VOO's, it trades at a lower 16.3 P/E, and its 13.9% return still kept pace within half a percentage point. The sector mix tells the same story - VOO is 35% technology, VYM only 17%, instead leaning toward financials and healthcare.

If you're reinvesting for 10-plus years and don't need income, VOO's broader market slice and tiny fee are hard to beat. Prefer a quieter ride or want dividends you can spend without selling shares? VYM's value tilt and higher yield do the job, just accept you'll miss some of the tech-driven upside when growth races ahead. Either way, both are cheap, diversified, and Vanguard-backed - pick the profile that matches your spending plans, then leave it alone.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.