FNDX vs VYM

FNDXASchwab Fundamental U.S. Large Company ETF

VYMAVanguard High Dividend Yield ETF

In short

FNDX A large-cap fund that refuses to size positions by stock price. FNDX weights about 700 U.S. companies by fundamental measures of business size, tilting toward value and profitability instead of whatever the market just bid up.

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

FNDX The fund seeks to track, before fees and expenses, an index representing large U.S. companies weighted according to fundamental size measures.

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

• FNDX Weights holdings by fundamental size rather than market cap, so a position grows with the business, not with the crowd. The RAFI screen leans on profitability and value.
• At 0.25% a year, it undercuts the typical fund in its multifactor peer group (median 0.32%).
• A multi-billion-dollar fund that trades actively, making it one of the easier names in its category to move in and out of. It has tracked its index tightly since launching in 2013.
• Fully rules-based and passive: the index does the picking and rebalancing, with no manager discretion in the mix. One of the stronger implementations in its peer group.

• 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

• FNDX Plain-vanilla alternatives cost far less: VONV runs 0.06% and VYM 0.04%. The fundamental weighting engine is what you pay the extra for.
• The value and profitability tilt means the portfolio can look very different from a cap-weighted large-cap index, especially when the largest growth names dominate.
• Income arrives quarterly, not monthly, and the mandate targets fundamentals rather than yield.

• 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 FNDX profile⁠

Full VYM profile⁠