IAGG vs VYM
iShares Core International Aggregate Bond ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | IAGG | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.07% | 0.04% | |
| AUM | $10.9B | $79.0B | |
| Dividend Yield | 3.63% | 2.86% | |
| Holdings | 8,021 | 568 | |
| YTD Return | -0.04% | +15.80% | |
| 1Y Return | -2.31% | +26.12% | |
| 3Y Return (annualized) | +3.08% | +18.25% | |
| 5Y Return (annualized) | -0.02% | +12.51% | |
| Volatility (annualized) | 4.1% | 14.6% | |
| Max Drawdown | -13.9% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 10, 2015 | Nov 10, 2006 |
IAGG vs VYM Performance
iShares Core International Aggregate Bond ETF (IAGG) is a ETF from iShares by BlackRock (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year IAGG returned -2.31% while VYM returned +26.12%. Year to date, IAGG is down 0.04% versus a gain of 15.80% for VYM.
Over three years, IAGG compounded at +3.08% per year against +18.25% for VYM; over five years the annualized figures are -0.02% and +12.51% respectively. Across the full 11-year window we track, VYM has the edge at +7.07% annualized vs +2.04%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 4.1% for IAGG. 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 -13.9% for IAGG and -58.8% for VYM. 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 0.31. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IAGG charges 0.07% per year while VYM charges 0.04%. On a $10,000 position that is $7 vs $4 annually, a gap of $3 per year that compounds over a long holding period. On income, IAGG currently yields 3.63% against 2.86% for VYM.
Holdings Overlap
IAGG and VYM share 0 holdings out of 942 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, IAGG or VYM?
IAGG has an expense ratio of 0.07% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, IAGG or VYM?
Over the past year IAGG returned -2.31% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (11 years), IAGG annualized +2.04% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, IAGG or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 4.1% for IAGG. Worst drawdown: IAGG -13.9% vs VYM -58.8%.
Should I hold both IAGG and VYM?
IAGG and VYM have a monthly-return correlation of 0.31, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IAGG and VYM?
IAGG and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 942 unique securities.
Which pays a higher dividend, IAGG or VYM?
IAGG yields 3.63% while VYM yields 2.86%, so IAGG currently pays the higher dividend yield.
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