IBDW vs VYM
iShares iBonds Dec 2031 Term Corporate 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 | IBDW | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.10% | 0.04% | |
| AUM | $2.5B | $79.0B | |
| Dividend Yield | 4.78% | 2.86% | |
| Holdings | 610 | 568 | |
| YTD Return | -0.27% | +16.16% | |
| 1Y Return | +2.42% | +26.05% | |
| 3Y Return (annualized) | +6.16% | +18.43% | |
| 5Y Return (annualized) | +0.12% | +12.21% | |
| Volatility (annualized) | 8.2% | 14.6% | |
| Max Drawdown | -23.9% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jun 22, 2021 | Nov 10, 2006 |
IBDW vs VYM Performance
iShares iBonds Dec 2031 Term Corporate ETF (IBDW) 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 IBDW returned +2.42% while VYM returned +26.05%. Year to date, IBDW is down 0.27% versus a gain of 16.16% for VYM.
Over three years, IBDW compounded at +6.16% per year against +18.43% for VYM; over five years the annualized figures are +0.12% and +12.21% respectively. Across the full 5-year window we track, VYM has the edge at +7.09% annualized vs +0.36%. 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 8.2% for IBDW. 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 -23.9% for IBDW 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 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IBDW charges 0.10% per year while VYM charges 0.04%. On a $10,000 position that is $10 vs $4 annually, a gap of $6 per year that compounds over a long holding period. On income, IBDW currently yields 4.78% against 2.86% for VYM.
Holdings Overlap
IBDW and VYM share 0 holdings out of 989 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, IBDW or VYM?
IBDW has an expense ratio of 0.10% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, IBDW or VYM?
Over the past year IBDW returned +2.42% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (5 years), IBDW annualized +0.36% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, IBDW or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 8.2% for IBDW. Worst drawdown: IBDW -23.9% vs VYM -58.8%.
Should I hold both IBDW and VYM?
IBDW and VYM have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IBDW and VYM?
IBDW and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 989 unique securities.
Which pays a higher dividend, IBDW or VYM?
IBDW yields 4.78% while VYM yields 2.86%, so IBDW currently pays the higher dividend yield.
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