IWO vs VYM
iShares Russell 2000 Growth ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. IWO delivered stronger 1-year returns. IWO offers more diversification with 1,125 holdings.
Side-by-Side Comparison
| Metric | IWO | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.24% | 0.04% | |
| AUM | $14.9B | $81.6B | |
| Dividend Yield | 0.44% | 2.24% | |
| Holdings | 1,125 | 613 | |
| YTD Return | +13.57% | +14.18% | |
| 1Y Return | +21.86% | +20.67% | |
| 3Y Return (annualized) | +16.74% | +18.47% | |
| 5Y Return (annualized) | +4.45% | +12.01% | |
| Volatility (annualized) | 21.6% | 14.5% | |
| Max Drawdown | -60.3% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jul 24, 2000 | Nov 10, 2006 |
IWO vs VYM Performance
iShares Russell 2000 Growth ETF (IWO) 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 IWO returned +21.86% while VYM returned +20.67%. Year to date, IWO is up 13.57% versus a gain of 14.18% for VYM.
Over three years, IWO compounded at +16.74% per year against +18.47% for VYM; over five years the annualized figures are +4.45% and +12.01% respectively. Across the full 20-year window we track, VYM has the edge at +6.97% annualized vs +6.43%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IWO has been the more volatile fund, with annualized monthly volatility of 21.6% compared with 14.5% for VYM. 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 -60.3% for IWO 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 0.79. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IWO charges 0.24% per year while VYM charges 0.04%. On a $10,000 position that is $24 vs $4 annually, a gap of $20 per year that compounds over a long holding period. On income, IWO currently yields 0.44% against 2.24% for VYM.
Holdings Overlap
IWO and VYM share 73 holdings out of 1630 unique holdings combined, representing a 1.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IWO or VYM?
IWO has an expense ratio of 0.24% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $20 per year of difference.
Which performed better, IWO or VYM?
Over the past year IWO returned +21.86% vs +20.67% for VYM, so IWO leads on 1-year performance. Over the longest common window we track (20 years), IWO annualized +6.43% vs +6.97% for VYM. Past performance does not guarantee future results.
Which is riskier, IWO or VYM?
IWO has been the more volatile fund at 21.6% annualized versus 14.5% for VYM. Worst drawdown: IWO -60.3% vs VYM -58.8%.
Should I hold both IWO and VYM?
IWO and VYM have a monthly-return correlation of 0.79, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IWO and VYM?
IWO and VYM share 73 common holdings with a 1.1% weight overlap. Combined, they hold 1630 unique securities.
Which pays a higher dividend, IWO or VYM?
IWO yields 0.44% while VYM yields 2.24%, so VYM currently pays the higher dividend yield.
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