IGI vs VYM
Western Asset Investment Grade Defined Opportunity Trust Inc. 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 | IGI | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.85% | 0.04% | |
| AUM | $102M | $79.0B | |
| Dividend Yield | 4.91% | 2.86% | |
| Holdings | 415 | 568 | |
| YTD Return | -0.82% | +16.16% | |
| 1Y Return | +0.90% | +26.05% | |
| 3Y Return (annualized) | +4.21% | +18.43% | |
| 5Y Return (annualized) | -1.58% | +12.21% | |
| Volatility (annualized) | 11.2% | 14.6% | |
| Max Drawdown | -34.0% | -58.8% | |
| Fund Family | Franklin Templeton Investments (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jun 26, 2009 | Nov 10, 2006 |
IGI vs VYM Performance
Western Asset Investment Grade Defined Opportunity Trust Inc. (IGI) is a ETF from Franklin Templeton Investments (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year IGI returned +0.90% while VYM returned +26.05%. Year to date, IGI is down 0.82% versus a gain of 16.16% for VYM.
Over three years, IGI compounded at +4.21% per year against +18.43% for VYM; over five years the annualized figures are -1.58% and +12.21% respectively. Across the full 17-year window we track, VYM has the edge at +7.09% annualized vs +0.17%. 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 11.2% for IGI. 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 -34.0% for IGI 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 0.38. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IGI charges 0.85% per year while VYM charges 0.04%. On a $10,000 position that is $85 vs $4 annually, a gap of $81 per year that compounds over a long holding period. On income, IGI currently yields 4.91% against 2.86% for VYM.
Holdings Overlap
IGI and VYM share 1 holdings out of 842 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in IGI | Weight in VYM | Difference |
|---|---|---|---|
| C | 0.32% | 0.81% | 0.49% |
Frequently Asked Questions
Which is cheaper, IGI or VYM?
IGI has an expense ratio of 0.85% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $81 per year of difference.
Which performed better, IGI or VYM?
Over the past year IGI returned +0.90% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (17 years), IGI annualized +0.17% vs +7.09% for VYM. Past performance does not guarantee future results.
Which is riskier, IGI or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 11.2% for IGI. Worst drawdown: IGI -34.0% vs VYM -58.8%.
Should I hold both IGI and VYM?
IGI and VYM have a monthly-return correlation of 0.38, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IGI and VYM?
IGI and VYM share 1 common holdings with a 0.3% weight overlap. Combined, they hold 842 unique securities.
Which pays a higher dividend, IGI or VYM?
IGI yields 4.91% while VYM yields 2.86%, so IGI currently pays the higher dividend yield.
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