HPS vs VTI
John Hancock Preferred Income Fund III vs Vanguard Total Stock Market ETF
Quick Verdict
VTI has a lower expense ratio. VTI delivered stronger 1-year returns. VTI offers more diversification with 2783 holdings.
Side-by-Side Comparison
| Metric | HPS | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 1.81% | 0.03% | |
| AUM | $474M | $663.5B | |
| Dividend Yield | 9.66% | 1.07% | |
| Holdings | 175 | 3,543 | |
| YTD Return | +4.42% | +14.22% | |
| 1Y Return | +7.00% | +22.19% | |
| 3Y Return (annualized) | +10.51% | +21.27% | |
| 5Y Return (annualized) | +2.67% | +12.23% | |
| Volatility (annualized) | 19.4% | 15.3% | |
| Max Drawdown | -77.7% | -56.6% | |
| Fund Family | John Hancock Investment Management | Vanguard (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jun 18, 2003 | May 24, 2001 |
HPS vs VTI Performance
John Hancock Preferred Income Fund III (HPS) is a ETF from John Hancock Investment Management and Vanguard Total Stock Market ETF (VTI) is a ETF from Vanguard (US). Over the past year HPS returned +7.00% while VTI returned +22.19%. Year to date, HPS is up 4.42% versus a gain of 14.22% for VTI.
Over three years, HPS compounded at +10.51% per year against +21.27% for VTI; over five years the annualized figures are +2.67% and +12.23% respectively. Across the full 23-year window we track, VTI has the edge at +8.14% annualized vs -0.39%. 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 15.3% for VTI. 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 -56.6% for VTI. 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 0.50. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HPS charges 1.81% per year while VTI 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 1.07% for VTI.
Holdings Overlap
HPS and VTI share 43 holdings out of 2835 unique holdings combined, representing a 3.6% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, HPS or VTI?
HPS has an expense ratio of 1.81% while VTI charges 0.03%. VTI is the cheaper option. On a $10,000 investment, that is $178 per year of difference.
Which performed better, HPS or VTI?
Over the past year HPS returned +7.00% vs +22.19% for VTI, so VTI leads on 1-year performance. Over the longest common window we track (23 years), HPS annualized -0.39% vs +8.14% for VTI. Past performance does not guarantee future results.
Which is riskier, HPS or VTI?
HPS has been the more volatile fund at 19.4% annualized versus 15.3% for VTI. Worst drawdown: HPS -77.7% vs VTI -56.6%.
Should I hold both HPS and VTI?
HPS and VTI have a monthly-return correlation of 0.50, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HPS and VTI?
HPS and VTI share 43 common holdings with a 3.6% weight overlap. Combined, they hold 2835 unique securities.
Which pays a higher dividend, HPS or VTI?
HPS yields 9.66% while VTI yields 1.07%, so HPS currently pays the higher dividend yield.
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