FAD vs VYM

FADCFirst Trust Multi Cap Growth AlphaDEX Fund

VYMAVanguard High Dividend Yield ETF

In short

FAD FAD has run First Trust's AlphaDEX screen since 2007, ranking US stocks on growth and value marks and spreading the survivors across roughly 700 names, small caps included. Rules-based stock picking wearing an index wrapper.

VYM The no-frills dividend workhorse. VYM buys the higher-yielding end of the US market, roughly 600 names, for four basis points: no quality screen, no dividend-growth-streak test, just yield, at scale since 2006.

Stated mandate

FAD The Fund seeks to track, before fees and expenses, the price and yield of the Nasdaq AlphaDEX Multi Cap Growth Index.

VYM The Fund seeks to track a benchmark index measuring the investment return of common stocks from companies characterized by high dividend yields.

Why people hold it

• FAD One ticker, roughly 700 US stocks spanning large, mid and small caps, so no single name or size band runs the show.ftportfolios.com
• Screens on growth and value marks rather than taking the market cap-weighted index as-is, and rebalances by rule instead of manager hunch.ftportfolios.com
• Live since 2007, so AlphaDEX here has a real-money record across multiple market cycles, not a backtest.
• Sticks to the job in its prospectus: tracking the Nasdaq AlphaDEX Multi Cap Growth Index, with little gap between what the documents describe and what it holds.ftportfolios.com

• VYM Four basis points a year, against a peer-group median near 0.32%. Cheaper than cohort neighbors VONV (0.06%) and FNDX (0.25%).
• Running since 2006 and now a multi-billion-dollar fund that trades actively, so ordinary orders tend to fill at tight spreads.
• Simple mandate: track the FTSE High Dividend Yield Index of US common stocks screened on yield. No manager discretion, no options overlay, plain 1940-Act fund.vanguard.com
• Pays quarterly, and among 100-plus value and multifactor rivals it stands as one of the strongest overall packages in the group.

Worth knowing

• FAD At 0.63% a year, it runs about double the typical fund in its multifactor group, and plain index peers like IUSG (0.04%) and VONV (0.06%) charge a sliver of that.
• Trading is thin next to the category's giants, so spreads can widen. Limit orders are the standard defense.
• Reaching down the cap ladder into smaller growth names means a choppier ride than a plain large-cap index.

• VYM The screen is yield, not payout growth or dividend quality, so a company can qualify simply because its share price fell.
• This is a value slice by design, tilted to established payers, so it behaves differently from a total US market fund.
• Roughly 600 holdings, but weight leans toward the largest payers, so the top of the roster does more of the work than the count suggests.

Full FAD profile⁠

Full VYM profile⁠