BAB vs VOO
Invesco Taxable Municipal Bond ETF vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. BAB offers more diversification with 995 holdings.
Side-by-Side Comparison
| Metric | BAB | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.03% | |
| AUM | $1.0B | $979.0B | |
| Dividend Yield | 4.10% | 1.09% | |
| Holdings | 1,480 | 509 | |
| YTD Return | -0.31% | +13.80% | |
| 1Y Return | +3.15% | +23.71% | |
| 3Y Return (annualized) | +4.53% | +21.50% | |
| 5Y Return (annualized) | -1.03% | +13.44% | |
| Volatility (annualized) | 7.3% | 14.1% | |
| Max Drawdown | -27.8% | -34.3% | |
| Fund Family | Invesco (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 17, 2009 | Sep 7, 2010 |
BAB vs VOO Performance
Invesco Taxable Municipal Bond ETF (BAB) is a ETF from Invesco (US) and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year BAB returned +3.15% while VOO returned +23.71%. Year to date, BAB is down 0.31% versus a gain of 13.80% for VOO.
Over three years, BAB compounded at +4.53% per year against +21.50% for VOO; over five years the annualized figures are -1.03% and +13.44% respectively. Across the full 16-year window we track, VOO has the edge at +13.58% annualized vs +1.53%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.1% 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 -34.3% for VOO. 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 0.20. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
BAB charges 0.28% per year while VOO 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 VOO.
Holdings Overlap
BAB and VOO 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 VOO?
BAB has an expense ratio of 0.28% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $25 per year of difference.
Which performed better, BAB or VOO?
Over the past year BAB returned +3.15% vs +23.71% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (16 years), BAB annualized +1.53% vs +13.58% for VOO. Past performance does not guarantee future results.
Which is riskier, BAB or VOO?
VOO has been the more volatile fund at 14.1% annualized versus 7.3% for BAB. Worst drawdown: BAB -27.8% vs VOO -34.3%.
Should I hold both BAB and VOO?
BAB and VOO have a monthly-return correlation of 0.20, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BAB and VOO?
BAB and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1500 unique securities.
Which pays a higher dividend, BAB or VOO?
BAB yields 4.10% while VOO yields 1.09%, so BAB currently pays the higher dividend yield.
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