IBHG vs VYM
iShares iBonds 2027 Term High Yield and Income 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 | IBHG | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.04% | |
| AUM | $517M | $81.6B | |
| Dividend Yield | 6.05% | 2.24% | |
| Holdings | 91 | 616 | |
| YTD Return | -1.57% | +16.42% | |
| 1Y Return | -0.14% | +24.22% | |
| 3Y Return (annualized) | +5.75% | +19.03% | |
| 5Y Return (annualized) | +2.93% | +12.21% | |
| Volatility (annualized) | 6.8% | 14.6% | |
| Max Drawdown | -13.8% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 7, 2021 | Nov 10, 2006 |
IBHG vs VYM Performance
iShares iBonds 2027 Term High Yield and Income ETF (IBHG) 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 IBHG returned -0.14% while VYM returned +24.22%. Year to date, IBHG is down 1.57% versus a gain of 16.42% for VYM.
Over three years, IBHG compounded at +5.75% per year against +19.03% for VYM; over five years the annualized figures are +2.93% and +12.21% respectively. Across the full 5-year window we track, VYM has the edge at +7.10% annualized vs +2.80%. 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 6.8% for IBHG. 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 -13.8% for IBHG 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 0.73. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IBHG charges 0.35% per year while VYM charges 0.04%. On a $10,000 position that is $35 vs $4 annually, a gap of $31 per year that compounds over a long holding period. On income, IBHG currently yields 6.05% against 2.24% for VYM.
Holdings Overlap
IBHG and VYM share 1 holdings out of 687 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in IBHG | Weight in VYM | Difference |
|---|---|---|---|
| MTCHII 5 12/15/27 14 | 0.76% | 0.04% | 0.72% |
Frequently Asked Questions
Which is cheaper, IBHG or VYM?
IBHG has an expense ratio of 0.35% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, IBHG or VYM?
Over the past year IBHG returned -0.14% vs +24.22% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (5 years), IBHG annualized +2.80% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, IBHG or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 6.8% for IBHG. Worst drawdown: IBHG -13.8% vs VYM -58.8%.
Should I hold both IBHG and VYM?
IBHG and VYM have a monthly-return correlation of 0.73, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IBHG and VYM?
IBHG and VYM share 1 common holdings with a 0.0% weight overlap. Combined, they hold 687 unique securities.
Which pays a higher dividend, IBHG or VYM?
IBHG yields 6.05% while VYM yields 2.24%, so IBHG currently pays the higher dividend yield.
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