IEI vs VOO
iShares 3-7 Year Treasury Bond ETF vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 509 holdings.
Side-by-Side Comparison
| Metric | IEI | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.03% | |
| AUM | $17.7B | $997.4B | |
| Dividend Yield | 3.67% | 1.08% | |
| Holdings | 85 | 509 | |
| YTD Return | -0.17% | +14.27% | |
| 1Y Return | +1.73% | +21.79% | |
| 3Y Return (annualized) | +4.23% | +22.19% | |
| 5Y Return (annualized) | +0.23% | +13.28% | |
| Volatility (annualized) | 3.9% | 14.2% | |
| Max Drawdown | -15.0% | -34.3% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jan 5, 2007 | Sep 7, 2010 |
IEI vs VOO Performance
iShares 3-7 Year Treasury Bond ETF (IEI) is a ETF from iShares by BlackRock (US) and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year IEI returned +1.73% while VOO returned +21.79%. Year to date, IEI is down 0.17% versus a gain of 14.27% for VOO.
Over three years, IEI compounded at +4.23% per year against +22.19% for VOO; over five years the annualized figures are +0.23% and +13.28% respectively. Across the full 16-year window we track, VOO has the edge at +13.59% annualized vs +1.49%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.2% compared with 3.9% for IEI. 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 -15.0% for IEI and -34.3% for VOO. 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 0.04. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IEI charges 0.15% per year while VOO charges 0.03%. On a $10,000 position that is $15 vs $3 annually, a gap of $12 per year that compounds over a long holding period. On income, IEI currently yields 3.67% against 1.08% for VOO.
Holdings Overlap
IEI and VOO share 0 holdings out of 567 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, IEI or VOO?
IEI has an expense ratio of 0.15% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $12 per year of difference.
Which performed better, IEI or VOO?
Over the past year IEI returned +1.73% vs +21.79% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (16 years), IEI annualized +1.49% vs +13.59% for VOO. Past performance does not guarantee future results.
Which is riskier, IEI or VOO?
VOO has been the more volatile fund at 14.2% annualized versus 3.9% for IEI. Worst drawdown: IEI -15.0% vs VOO -34.3%.
Should I hold both IEI and VOO?
IEI and VOO have a monthly-return correlation of 0.04, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IEI and VOO?
IEI and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 567 unique securities.
Which pays a higher dividend, IEI or VOO?
IEI yields 3.67% while VOO yields 1.08%, so IEI currently pays the higher dividend yield.
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