BAB vs IVV
Invesco Taxable Municipal Bond ETF vs iShares Core S&P 500 ETF
Quick Verdict
IVV has a lower expense ratio. IVV delivered stronger 1-year returns. BAB offers more diversification with 995 holdings.
Side-by-Side Comparison
| Metric | BAB | IVV | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.03% | |
| AUM | $1.0B | $865.2B | |
| Dividend Yield | 4.10% | 1.09% | |
| Holdings | 1,480 | 508 | |
| YTD Return | -0.76% | +13.80% | |
| 1Y Return | +2.70% | +23.01% | |
| 3Y Return (annualized) | +4.69% | +21.77% | |
| 5Y Return (annualized) | -1.09% | +13.39% | |
| Volatility (annualized) | 7.3% | 15.1% | |
| Max Drawdown | -27.8% | -56.5% | |
| Fund Family | Invesco (US) | iShares by BlackRock (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 17, 2009 | May 15, 2000 |
BAB vs IVV Performance
Invesco Taxable Municipal Bond ETF (BAB) is a ETF from Invesco (US) and iShares Core S&P 500 ETF (IVV) is a ETF from iShares by BlackRock (US). Over the past year BAB returned +2.70% while IVV returned +23.01%. Year to date, BAB is down 0.76% versus a gain of 13.80% for IVV.
Over three years, BAB compounded at +4.69% per year against +21.77% for IVV; over five years the annualized figures are -1.09% and +13.39% respectively. Across the full 17-year window we track, IVV has the edge at +7.04% annualized vs +1.51%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IVV has been the more volatile fund, with annualized monthly volatility of 15.1% compared with 7.3% for BAB. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -27.8% for BAB and -56.5% for IVV. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.16. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
BAB charges 0.28% per year while IVV charges 0.03%. On a $10,000 position that is $28 vs $3 annually, a gap of $25 per year that compounds over a long holding period. On income, BAB currently yields 4.10% against 1.09% for IVV.
Holdings Overlap
BAB and IVV share 0 holdings out of 1500 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, BAB or IVV?
BAB has an expense ratio of 0.28% while IVV charges 0.03%. IVV is the cheaper option. On a $10,000 investment, that is $25 per year of difference.
Which performed better, BAB or IVV?
Over the past year BAB returned +2.70% vs +23.01% for IVV, so IVV leads on 1-year performance. Over the longest common window we track (17 years), BAB annualized +1.51% vs +7.04% for IVV. Past performance does not guarantee future results.
Which is riskier, BAB or IVV?
IVV has been the more volatile fund at 15.1% annualized versus 7.3% for BAB. Worst drawdown: BAB -27.8% vs IVV -56.5%.
Should I hold both BAB and IVV?
BAB and IVV have a monthly-return correlation of 0.16, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BAB and IVV?
BAB and IVV share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1500 unique securities.
Which pays a higher dividend, BAB or IVV?
BAB yields 4.10% while IVV yields 1.09%, so BAB currently pays the higher dividend yield.
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