VEA vs VYM: Correlation & Overlap
How closely do Vanguard FTSE Developed Markets ETF (VEA) and Vanguard High Dividend Yield ETF (VYM) trade together? Their weekly returns over three years give a correlation of 0.75, which is strong. The two funds also share 1.6% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and VYM?
Across a 3-year window, the weekly returns of VEA and VYM correlate at 0.75, strong. Little has changed lately, as the 1-year reading of 0.71 lands near the 3-year figure. Stretching to 5 years gives 0.77, with an annualized covariance of 139.2 %².
Within VEA's tracked universe of 107 assets, VYM comes in at #29 by 3-year correlation. The trailing year gives VEA the advantage: +28.5% versus +21.1%, a 7.4-point spread. The rolling one-year correlation stayed in a tight band between 0.65 and 0.85 over the past three years, which points to a structural rather than episodic relationship.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
VEA vs VYM: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +28.5% | +21.1% |
| 5-year return | +63.5% | +76.6% |
| Volatility (ann.) | 15.1% | 12.3% |
| Beta vs S&P 500 | 0.79 | 0.69 |
| Max drawdown (3Y) | -13.5% | -14.5% |
| Dividend yield | 2.56% | 2.24% |
| Expense ratio | 0.03% | 0.04% |
| Assets under management | $314.9B | $99.2B |
| Sector / category | ETF · International | ETF · Dividend |
VEA is a Foreign Large Blend fund from Vanguard: $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield. VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield.
Portfolio overlap between VEA and VYM
The two portfolios are largely distinct. Weighing the shared positions, 1.6% of the two funds is identical, spread across 74 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VEA | Weight in VYM |
|---|---|---|
| PRU | 0.13% | 0.17% |
| DTE | 0.33% | 0.12% |
| DG | 0.22% | 0.11% |
| PPL | 0.09% | 0.11% |
| EL | 0.17% | 0.08% |
| ALL | 0.08% | 0.28% |
| MRK | 0.07% | 1.31% |
| TSCO | 0.13% | 0.07% |
| HBAN | 0.06% | 0.14% |
| EQT | 0.06% | 0.13% |
| BG | 0.05% | 0.06% |
| ADM | 0.04% | 0.15% |
| CFR | 0.40% | 0.04% |
| ALV | 0.60% | 0.04% |
| KEY | 0.03% | 0.09% |
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%). Only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 15 common positions shown.
Year-by-year returns
| Year | VEA | VYM |
|---|---|---|
| 2022 | -15.3% | -0.4% |
| 2023 | +17.9% | +6.6% |
| 2024 | +3.1% | +17.6% |
| 2025 | +35.2% | +15.4% |
| 2026 | +18.3% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and VYM good diversifiers for each other?
Only partially. A correlation of 0.75 means VEA and VYM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between VEA and VYM?
Using weekly returns as of 2026-08-27: 0.75 over 3 years, with 0.71 over the last year and 0.77 over 5 years.
Is VYM a good diversifier for VEA?
Only partially. A correlation of 0.75 means VEA and VYM share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VEA and VYM overlap?
The two funds share 74 holdings amounting to 1.6% of weight, per issuer portfolio files dated 2026-07-31.
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