TMFE vs VYM

TMFECMotley Fool Capital Efficiency 100 Index ETF

VYMAVanguard High Dividend Yield ETF

In short

TMFE Stock-picking research in an index wrapper. TMFE screens The Motley Fool's own recommendation universe down to the 100 most capital-efficient companies, then caps each position at 4.8%.

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

TMFE The fund seeks to track, before fees and expenses, the total return performance of the proprietary Capital Efficiency 100 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

• TMFE The universe is the twist: eligibility starts with US companies Motley Fool analysts have recommended or rated highly, and a capital-efficiency score picks the 100 that make the cut.fooletfs.comfooletfs.com 2
• A 4.8% cap per holding at rebalance keeps one hot name from quietly becoming the whole fund.fooletfs.com
• The screen is spelled out in the prospectus: growth and profitability via a named Capital Efficiency Factor Score, run passively against a published US equity index.

• 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

• TMFE At 0.50% a year it costs more than the typical multifactor peer, and plain index rivals like IUSG and VONV charge a small fraction of that.
• The benchmark is proprietary to The Motley Fool, not an independent index house, and it has only been live since the fund's 2021 launch.usnews.com
• A smaller fund that trades lightly, so bid-ask spreads tend to run wider than on mega-cap index ETFs.

• 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 TMFE profile⁠

Full VYM profile⁠