FSCS vs VYM

FSCSCFirst Trust SMID Capital Strength ETF

VYMAVanguard High Dividend Yield ETF

In short

FSCS First Trust pointed its Capital Strength screen at the small and mid cap end of the US market: about 100 names picked by rule, not hunch, filtered for quality, growth and lower volatility.

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

FSCS The Fund seeks investment results generally corresponding to the price and yield, before fees and expenses, of the SMID Capital Strength Index. It normally invests at least 80% of net assets, plus investment borrowings, in index 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

• FSCS Takes the Capital Strength playbook down the cap ladder: a quality, growth and low-volatility screen applied to US small and mid caps.ftportfolios.com
• Rules run the show. It normally keeps at least 80% of net assets in the index's securities, so you get the screen, not a manager's mood.ftportfolios.com
• A tight roster of roughly 100 US stocks, with cash 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

• FSCS The 0.60% annual fee sits well above the typical US multifactor fund. Broad peers like VONV and FNDX charge a fraction of it.
• Thinly traded and modest in assets, so bid-ask spreads can run wider than the household names in the category.
• Screening for balance-sheet quality and lower volatility means the portfolio can look nothing like a plain small-cap index, in either direction.

• 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 FSCS profile⁠

Full VYM profile⁠