INCM vs. SMOT

Last updated Jun 23, 2026

INCM (Franklin Income Focus ETF) and SMOT (VanEck Morningstar SMID Moat ETF) are both exchange-traded funds - INCM is a Diversified Portfolio fund actively managed by Franklin Templeton, while SMOT is a Mid Cap Blend Equities fund tracking the Morningstar US Small-Mid Cap Moat Focus. INCM is actively managed, while SMOT is passively managed. Over the past 3 years, INCM returned 10.60%/yr vs 11.01%/yr for SMOT. A 0.68 correlation means they provide meaningful diversification when combined. INCM charges 0.38%/yr vs 0.49%/yr for SMOT.

Performance

INCM vs. SMOT - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Franklin Income Focus ETF (INCM) and VanEck Morningstar SMID Moat ETF (SMOT). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, INCM achieves a 5.80% return, which is significantly higher than SMOT's 5.47% return.

INCM

• 1D: -0.68%
• 1M: -0.84%
• YTD: 5.80%
• 6M: 5.84%
• 1Y: 14.29%
• 3Y*: 10.60%
• 5Y*: —
• 10Y*: —

SMOT

• 1D: -0.62%
• 1M: 0.99%
• YTD: 5.47%
• 6M: 4.06%
• 1Y: 14.98%
• 3Y*: 11.01%
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

INCM vs. SMOT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
INCM Franklin Income Focus ETF	5.80%	13.07%	6.80%	5.76%
SMOT VanEck Morningstar SMID Moat ETF	5.47%	6.46%	10.71%	9.02%

Correlation

The correlation between INCM and SMOT is 0.73, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.73
Correlation (3Y) Calculated over the trailing 3-year period	0.68
Correlation (All Time) Calculated using the full available price history since Jun 8, 2023	0.68

The correlation between INCM and SMOT has been stable across timeframes, ranging from 0.68 to 0.73 - a consistent structural relationship.

Return for Risk

INCM vs. SMOT — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

INCM

INCM Risk / Return Rank: 86
INCM Sharpe Ratio Rank: 84
INCM Sortino Ratio Rank: 86
INCM Omega Ratio Rank: 84
INCM Calmar Ratio Rank: 85
INCM Martin Ratio Rank: 89

SMOT

SMOT Risk / Return Rank: 32
SMOT Sharpe Ratio Rank: 30
SMOT Sortino Ratio Rank: 31
SMOT Omega Ratio Rank: 27
SMOT Calmar Ratio Rank: 35
SMOT Martin Ratio Rank: 36

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

INCM vs. SMOT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Franklin Income Focus ETF (INCM) and VanEck Morningstar SMID Moat ETF (SMOT). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	INCM	SMOT	Difference
Sharpe ratio: Return per unit of total volatility	2.58	1.05	+1.53
Sortino ratio: Return per unit of downside risk	3.71	1.62	+2.09
Omega ratio: Gain probability vs. loss probability	1.49	1.18	+0.30
Calmar ratio: Return relative to maximum drawdown	4.50	1.69	+2.81
Martin ratio: Return relative to average drawdown	18.66	5.38	+13.27

INCM vs. SMOT - Sharpe Ratio Comparison

The current INCM Sharpe Ratio is 2.58, which is higher than the SMOT Sharpe Ratio of 1.05. The chart below compares the historical Sharpe Ratios of INCM and SMOT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

INCM vs. SMOT - Drawdown Comparison

The maximum INCM drawdown since its inception was -7.84%, smaller than the maximum SMOT drawdown of -23.36%. Use the drawdown chart below to compare losses from any high point for INCM and SMOT.

Drawdown Indicators

	INCM	SMOT	Difference
Max Drawdown Largest peak-to-trough decline	-7.84%	-23.36%	+15.52%
Max Drawdown (1Y) Largest decline over 1 year	-3.19%	-8.91%	+5.72%
Max Drawdown (3Y) Largest decline over 3 years	-7.84%	-23.36%	+15.52%
Current Drawdown Current decline from peak	-1.36%	-2.38%	+1.02%
Average Drawdown Average peak-to-trough decline	-1.08%	-4.79%	+3.71%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.77%	2.79%	-2.02%

Volatility

INCM vs. SMOT - Volatility Comparison

The current volatility for Franklin Income Focus ETF (INCM) is 2.40%, while VanEck Morningstar SMID Moat ETF (SMOT) has a volatility of 4.80%. This indicates that INCM experiences smaller price fluctuations and is considered to be less risky than SMOT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	INCM	SMOT	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.40%	4.80%	-2.40%
Volatility (6M) Calculated over the trailing 6-month period	4.27%	10.07%	-5.80%
Volatility (1Y) Calculated over the trailing 1-year period	5.57%	14.37%	-8.80%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	7.28%	18.44%	-11.16%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	7.28%	18.44%	-11.16%

INCM vs. SMOT - Expense Ratio Comparison

INCM has a 0.38% expense ratio, which is lower than SMOT's 0.49% expense ratio.

Dividends

INCM vs. SMOT - Dividend Comparison

INCM's dividend yield for the trailing twelve months is around 5.11%, more than SMOT's 1.30% yield.

Position	TTM	2025	2024	2023	2022
INCM Franklin Income Focus ETF	5.11%	4.96%	5.06%	3.01%	0.00%
SMOT VanEck Morningstar SMID Moat ETF	1.30%	1.37%	1.18%	0.65%	0.24%

Frequently Asked Questions

Can I hold both INCM and SMOT in my portfolio?

INCM and SMOT have a correlation of 0.73, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, INCM or SMOT?

SMOT has higher volatility (4.80%) compared to INCM (2.40%). In terms of maximum drawdown, INCM dropped -7.84% vs SMOT's -23.36%.

Which ETF is better, INCM or SMOT?

On 3-year performance, SMOT leads with 11.01% vs 10.60% for INCM. On fees, INCM is cheaper at 0.38% per year. On volatility, INCM has been the lower-risk option at 2.40%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, INCM or SMOT?

Over the 3-year period, SMOT has performed better with a 11.01% return vs 10.60%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, INCM or SMOT?

INCM is cheaper with a 0.38% expense ratio, compared with 0.49% for SMOT.

Which ETF pays a higher dividend yield, INCM or SMOT?

INCM has the higher dividend yield at 5.11%, compared with 1.30% for SMOT.

What is the main difference between INCM and SMOT?

INCM is categorized as Diversified Portfolio, while SMOT is Mid Cap Blend Equities. They also come from different issuers: Franklin Templeton and VanEck. Their fees differ too: 0.38% for INCM and 0.49% for SMOT.

Which has better risk-adjusted returns?

INCM currently has the higher Sharpe Ratio (2.58 vs 1.05), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.