FLQS vs VYM

FLQSCFranklin U.S. Small Cap Multifactor Index ETF

VYMAVanguard High Dividend Yield ETF

In short

FLQS Four screens (value, quality, momentum, low volatility) run across about 500 small U.S. companies. Franklin's LibertyQ recipe, live since 2017: small-cap breadth with a rules-based tilt instead of a plain size index.

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

FLQS The Fund seeks to track, before fees and expenses, the LibertyQ U.S. Small Cap Equity Index. It normally invests at least 80% of assets in the index's component securities.

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

• FLQS Four factors in one ticket: value, quality, momentum and low volatility, blended by index rule rather than by a manager's mood.
• Roughly 500 names spread single-stock accidents thin, which counts for more in small caps than anywhere else on the risk spectrum.
• Sticks close to its LibertyQ benchmark, so the index rulebook is a fair description of what actually sits in the portfolio.
• Same mandate since its 2017 launch, with income paid out quarterly.

• 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

• FLQS 0.35% a year sits a shade above the typical multifactor peer, and above cheaper rules-based options such as FNDX at 0.25%.
• One of the lighter-traded funds in its category, so bid-ask spreads can add cost beyond the headline fee.
• Small caps swing harder than large caps. The low-volatility screen softens that ride, it does not remove it.

• 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 FLQS profile⁠

Full VYM profile⁠