SMOT vs VYM

SMOTCVanEck Morningstar SMID Moat ETF

VYMAVanguard High Dividend Yield ETF

In short

SMOT Morningstar's moat research, aimed down the cap ladder. SMOT tracks an index of small- and mid-cap companies flagged for durable competitive advantages, and buys them only when they screen as attractively valued.

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

SMOT The fund seeks to track, before fees and expenses, the price and yield performance of the Morningstar US Small-Mid Cap Moat Focus Index, an index of small- and mid-cap companies selected for sustainable competitive advantages and attractive valuations.

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

• SMOT Two screens, not one: companies must show a sustainable competitive advantage AND look attractively valued. Quality and value in a single published rulebook rather than a manager's hunch.vaneck.com
• Takes the moat idea into small- and mid-cap territory, where wide-moat businesses are scarcer and less picked over than in the mega-cap crowd.vaneck.com
• Roughly 120 US stocks: concentrated enough for the moat screen to actually show up in returns, broad enough that no single name dominates the portfolio.
• Fully rules-based against a named, public benchmark (Morningstar US Small-Mid Cap Moat Focus Index), so you can read the methodology instead of guessing at it.

• 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

• SMOT The research costs money: 0.49% a year, well above plain factor workhorses like FNDX at 0.25% or VONV at 0.06%. You're paying for the moat screen.
• Thinly traded compared with the giants of the US factor aisle, which can mean wider bid-ask spreads. Distributions arrive once or twice a year, not monthly.
• Launched in 2022, so the live record is short, and in a crowded field of 100-plus US factor funds it lands in the lower half of our overall read.

• 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 SMOT profile⁠

Full VYM profile⁠