ISTB vs VTI
iShares Core 1-5 Year USD Bond ETF vs Vanguard Morningstar Total Stock Market ETF
Quick Verdict
VTI has a lower expense ratio. VTI delivered stronger 1-year returns. ISTB offers more diversification with 7,038 holdings.
Side-by-Side Comparison
| Metric | ISTB | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.03% | |
| AUM | $5.1B | $666.9B | |
| Dividend Yield | 4.26% | 1.07% | |
| Holdings | 7,038 | 3,543 | |
| YTD Return | +1.06% | +14.82% | |
| 1Y Return | +3.12% | +22.43% | |
| 3Y Return (annualized) | +5.34% | +21.93% | |
| 5Y Return (annualized) | +2.03% | +12.34% | |
| Volatility (annualized) | 2.2% | 15.4% | |
| Max Drawdown | -50.1% | -56.6% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 18, 2012 | May 24, 2001 |
ISTB vs VTI Performance
iShares Core 1-5 Year USD Bond ETF (ISTB) is a ETF from iShares by BlackRock (US) and Vanguard Morningstar Total Stock Market ETF (VTI) is a ETF from Vanguard (US). Over the past year ISTB returned +3.12% while VTI returned +22.43%. Year to date, ISTB is up 1.06% versus a gain of 14.82% for VTI.
Over three years, ISTB compounded at +5.34% per year against +21.93% for VTI; over five years the annualized figures are +2.03% and +12.34% respectively. Across the full 14-year window we track, VTI has the edge at +8.16% annualized vs +0.97%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTI has been the more volatile fund, with annualized monthly volatility of 15.4% compared with 2.2% for ISTB. 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 -50.1% for ISTB and -56.6% for VTI. 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 0.42. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
ISTB charges 0.06% per year while VTI charges 0.03%. On a $10,000 position that is $6 vs $3 annually, a gap of $3 per year that compounds over a long holding period. On income, ISTB currently yields 4.26% against 1.07% for VTI.
Holdings Overlap
ISTB and VTI share 3 holdings out of 5002 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, ISTB or VTI?
ISTB has an expense ratio of 0.06% while VTI charges 0.03%. VTI is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, ISTB or VTI?
Over the past year ISTB returned +3.12% vs +22.43% for VTI, so VTI leads on 1-year performance. Over the longest common window we track (14 years), ISTB annualized +0.97% vs +8.16% for VTI. Past performance does not guarantee future results.
Which is riskier, ISTB or VTI?
VTI has been the more volatile fund at 15.4% annualized versus 2.2% for ISTB. Worst drawdown: ISTB -50.1% vs VTI -56.6%.
Should I hold both ISTB and VTI?
ISTB and VTI have a monthly-return correlation of 0.42, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between ISTB and VTI?
ISTB and VTI share 3 common holdings with a 0.1% weight overlap. Combined, they hold 5002 unique securities.
Which pays a higher dividend, ISTB or VTI?
ISTB yields 4.26% while VTI yields 1.07%, so ISTB currently pays the higher dividend yield.
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