IEI vs VYM
iShares 3-7 Year Treasury 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 616 holdings.
Side-by-Side Comparison
| Metric | IEI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.04% | |
| AUM | $17.7B | $81.6B | |
| Dividend Yield | 3.67% | 2.24% | |
| Holdings | 85 | 616 | |
| YTD Return | -0.21% | +14.66% | |
| 1Y Return | +1.60% | +22.16% | |
| 3Y Return (annualized) | +4.34% | +18.72% | |
| 5Y Return (annualized) | +0.25% | +12.18% | |
| Volatility (annualized) | 3.9% | 14.6% | |
| Max Drawdown | -15.0% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jan 5, 2007 | Nov 10, 2006 |
IEI vs VYM Performance
iShares 3-7 Year Treasury Bond ETF (IEI) 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 IEI returned +1.60% while VYM returned +22.16%. Year to date, IEI is down 0.21% versus a gain of 14.66% for VYM.
Over three years, IEI compounded at +4.34% per year against +18.72% for VYM; over five years the annualized figures are +0.25% and +12.18% respectively. Across the full 20-year window we track, VYM has the edge at +7.01% annualized vs +1.49%. 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 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 -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 -0.06. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IEI charges 0.15% per year while VYM charges 0.04%. On a $10,000 position that is $15 vs $4 annually, a gap of $11 per year that compounds over a long holding period. On income, IEI currently yields 3.67% against 2.24% for VYM.
Holdings Overlap
IEI and VYM share 0 holdings out of 665 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 VYM?
IEI has an expense ratio of 0.15% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $11 per year of difference.
Which performed better, IEI or VYM?
Over the past year IEI returned +1.60% vs +22.16% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), IEI annualized +1.49% vs +7.01% for VYM. Past performance does not guarantee future results.
Which is riskier, IEI or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 3.9% for IEI. Worst drawdown: IEI -15.0% vs VYM -58.8%.
Should I hold both IEI and VYM?
IEI and VYM have a monthly-return correlation of -0.06, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IEI and VYM?
IEI and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 665 unique securities.
Which pays a higher dividend, IEI or VYM?
IEI yields 3.67% while VYM yields 2.24%, so IEI currently pays the higher dividend yield.
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