HPS vs VOO
John Hancock Preferred Income Fund III vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | HPS | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 1.81% | 0.03% | |
| AUM | $474M | $979.0B | |
| Dividend Yield | 9.66% | 1.09% | |
| Holdings | 175 | 509 | |
| YTD Return | +4.20% | +13.44% | |
| 1Y Return | +7.07% | +22.62% | |
| 3Y Return (annualized) | +10.44% | +21.47% | |
| 5Y Return (annualized) | +2.64% | +13.27% | |
| Volatility (annualized) | 19.4% | 14.1% | |
| Max Drawdown | -77.7% | -34.3% | |
| Fund Family | John Hancock Investment Management | Vanguard (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jun 18, 2003 | Sep 7, 2010 |
HPS vs VOO Performance
John Hancock Preferred Income Fund III (HPS) is a ETF from John Hancock Investment Management and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year HPS returned +7.07% while VOO returned +22.62%. Year to date, HPS is up 4.20% versus a gain of 13.44% for VOO.
Over three years, HPS compounded at +10.44% per year against +21.47% for VOO; over five years the annualized figures are +2.64% and +13.27% respectively. Across the full 16-year window we track, VOO has the edge at +13.55% annualized vs -0.40%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
HPS has been the more volatile fund, with annualized monthly volatility of 19.4% compared with 14.1% for VOO. 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 -77.7% for HPS 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 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HPS charges 1.81% per year while VOO charges 0.03%. On a $10,000 position that is $181 vs $3 annually, a gap of $178 per year that compounds over a long holding period. On income, HPS currently yields 9.66% against 1.09% for VOO.
Holdings Overlap
HPS and VOO share 24 holdings out of 576 unique holdings combined, representing a 3.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, HPS or VOO?
HPS has an expense ratio of 1.81% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $178 per year of difference.
Which performed better, HPS or VOO?
Over the past year HPS returned +7.07% vs +22.62% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (16 years), HPS annualized -0.40% vs +13.55% for VOO. Past performance does not guarantee future results.
Which is riskier, HPS or VOO?
HPS has been the more volatile fund at 19.4% annualized versus 14.1% for VOO. Worst drawdown: HPS -77.7% vs VOO -34.3%.
Should I hold both HPS and VOO?
HPS and VOO have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HPS and VOO?
HPS and VOO share 24 common holdings with a 3.8% weight overlap. Combined, they hold 576 unique securities.
Which pays a higher dividend, HPS or VOO?
HPS yields 9.66% while VOO yields 1.09%, so HPS currently pays the higher dividend yield.
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