IAI vs VYM
iShares US Broker-Dealers & Securities Exchanges 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 616 holdings.
Side-by-Side Comparison
| Metric | IAI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.37% | 0.04% | |
| AUM | $1.4B | $81.6B | |
| Dividend Yield | 1.10% | 2.24% | |
| Holdings | 40 | 616 | |
| YTD Return | +4.58% | +14.66% | |
| 1Y Return | +10.69% | +22.16% | |
| 3Y Return (annualized) | +28.19% | +18.72% | |
| 5Y Return (annualized) | +13.99% | +12.18% | |
| Volatility (annualized) | 22.6% | 14.6% | |
| Max Drawdown | -75.8% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 1, 2006 | Nov 10, 2006 |
IAI vs VYM Performance
iShares US Broker-Dealers & Securities Exchanges ETF (IAI) 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 IAI returned +10.69% while VYM returned +22.16%. Year to date, IAI is up 4.58% versus a gain of 14.66% for VYM.
Over three years, IAI compounded at +28.19% per year against +18.72% for VYM; over five years the annualized figures are +13.99% and +12.18% respectively. Across the full 20-year window we track, IAI has the edge at +7.11% annualized vs +7.01%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IAI has been the more volatile fund, with annualized monthly volatility of 22.6% compared with 14.6% for VYM. 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 -75.8% for IAI 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IAI charges 0.37% per year while VYM charges 0.04%. On a $10,000 position that is $37 vs $4 annually, a gap of $33 per year that compounds over a long holding period. On income, IAI currently yields 1.10% against 2.24% for VYM.
Holdings Overlap
IAI and VYM share 15 holdings out of 624 unique holdings combined, representing a 3.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IAI or VYM?
IAI has an expense ratio of 0.37% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $33 per year of difference.
Which performed better, IAI or VYM?
Over the past year IAI returned +10.69% vs +22.16% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), IAI annualized +7.11% vs +7.01% for VYM. Past performance does not guarantee future results.
Which is riskier, IAI or VYM?
IAI has been the more volatile fund at 22.6% annualized versus 14.6% for VYM. Worst drawdown: IAI -75.8% vs VYM -58.8%.
Should I hold both IAI and VYM?
IAI and VYM have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IAI and VYM?
IAI and VYM share 15 common holdings with a 3.0% weight overlap. Combined, they hold 624 unique securities.
Which pays a higher dividend, IAI or VYM?
IAI yields 1.10% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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