IVV vs TAXF
iShares Core S&P 500 ETF vs American Century Diversified Municipal Bond ETF
Quick Verdict
IVV has a lower expense ratio. IVV delivered stronger 1-year returns. TAXF offers more diversification with 785 holdings.
Side-by-Side Comparison
| Metric | IVV | TAXF | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.25% | |
| AUM | $907.0B | $686M | |
| Dividend Yield | 1.10% | 3.84% | |
| Holdings | 508 | 785 | |
| YTD Return | +12.71% | +0.81% | |
| 1Y Return | +21.89% | +6.01% | |
| 3Y Return (annualized) | +22.08% | +4.01% | |
| 5Y Return (annualized) | +12.96% | +0.72% | |
| Volatility (annualized) | 15.1% | 6.0% | |
| Max Drawdown | -56.5% | -13.9% | |
| Fund Family | iShares by BlackRock (US) | American Century Investments | |
| Category | Equity | Tax Preferred | |
| Inception | May 15, 2000 | Sep 10, 2018 |
IVV vs TAXF Performance
iShares Core S&P 500 ETF (IVV) is a ETF from iShares by BlackRock (US) and American Century Diversified Municipal Bond ETF (TAXF) is a ETF from American Century Investments. Over the past year IVV returned +21.89% while TAXF returned +6.01%. Year to date, IVV is up 12.71% versus a gain of 0.81% for TAXF.
Over three years, IVV compounded at +22.08% per year against +4.01% for TAXF; over five years the annualized figures are +12.96% and +0.72% respectively. Across the full 8-year window we track, IVV has the edge at +7.00% annualized vs +1.91%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IVV has been the more volatile fund, with annualized monthly volatility of 15.1% compared with 6.0% for TAXF. 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 -56.5% for IVV and -13.9% for TAXF. 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 0.52. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IVV charges 0.03% per year while TAXF charges 0.25%. On a $10,000 position that is $3 vs $25 annually, a gap of $22 per year that compounds over a long holding period. On income, IVV currently yields 1.10% against 3.84% for TAXF.
Holdings Overlap
IVV and TAXF share 0 holdings out of 996 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, IVV or TAXF?
IVV has an expense ratio of 0.03% while TAXF charges 0.25%. IVV is the cheaper option. On a $10,000 investment, that is $22 per year of difference.
Which performed better, IVV or TAXF?
Over the past year IVV returned +21.89% vs +6.01% for TAXF, so IVV leads on 1-year performance. Over the longest common window we track (8 years), IVV annualized +7.00% vs +1.91% for TAXF. Past performance does not guarantee future results.
Which is riskier, IVV or TAXF?
IVV has been the more volatile fund at 15.1% annualized versus 6.0% for TAXF. Worst drawdown: IVV -56.5% vs TAXF -13.9%.
Should I hold both IVV and TAXF?
IVV and TAXF have a monthly-return correlation of 0.52, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IVV and TAXF?
IVV and TAXF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 996 unique securities.
Which pays a higher dividend, IVV or TAXF?
IVV yields 1.10% while TAXF yields 3.84%, so TAXF currently pays the higher dividend yield.
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