ISTB vs VYM
iShares Core 1-5 Year USD Bond ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. ISTB offers more diversification with 2218 holdings.
Side-by-Side Comparison
| Metric | ISTB | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.04% | |
| AUM | $5.1B | $79.0B | |
| Dividend Yield | 4.24% | 2.86% | |
| Holdings | 7,038 | 568 | |
| YTD Return | +0.57% | +16.53% | |
| 1Y Return | +2.66% | +25.03% | |
| 3Y Return (annualized) | +5.16% | +18.54% | |
| 5Y Return (annualized) | +1.96% | +12.25% | |
| Volatility (annualized) | 2.2% | 14.6% | |
| Max Drawdown | -50.1% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 18, 2012 | Nov 10, 2006 |
ISTB vs VYM Performance
iShares Core 1-5 Year USD Bond ETF (ISTB) 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 ISTB returned +2.66% while VYM returned +25.03%. Year to date, ISTB is up 0.57% versus a gain of 16.53% for VYM.
Over three years, ISTB compounded at +5.16% per year against +18.54% for VYM; over five years the annualized figures are +1.96% and +12.25% respectively. Across the full 14-year window we track, VYM has the edge at +7.10% annualized vs +0.93%. 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 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 -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 0.36. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
ISTB charges 0.06% per year while VYM charges 0.04%. On a $10,000 position that is $6 vs $4 annually, a gap of $2 per year that compounds over a long holding period. On income, ISTB currently yields 4.24% against 2.86% for VYM.
Holdings Overlap
ISTB and VYM share 3 holdings out of 2773 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, ISTB or VYM?
ISTB has an expense ratio of 0.06% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, ISTB or VYM?
Over the past year ISTB returned +2.66% vs +25.03% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (14 years), ISTB annualized +0.93% vs +7.10% for VYM. Past performance does not guarantee future results.
Which is riskier, ISTB or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.2% for ISTB. Worst drawdown: ISTB -50.1% vs VYM -58.8%.
Should I hold both ISTB and VYM?
ISTB and VYM have a monthly-return correlation of 0.36, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between ISTB and VYM?
ISTB and VYM share 3 common holdings with a 0.0% weight overlap. Combined, they hold 2773 unique securities.
Which pays a higher dividend, ISTB or VYM?
ISTB yields 4.24% while VYM yields 2.86%, so ISTB currently pays the higher dividend yield.
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