IYG vs VOO
iShares US Financial Services ETF vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 509 holdings.
Side-by-Side Comparison
| Metric | IYG | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.38% | 0.03% | |
| AUM | $2.2B | $997.4B | |
| Dividend Yield | 1.03% | 1.08% | |
| Holdings | 104 | 509 | |
| YTD Return | +3.63% | +12.25% | |
| 1Y Return | +10.84% | +20.92% | |
| 3Y Return (annualized) | +23.30% | +21.79% | |
| 5Y Return (annualized) | +10.56% | +13.05% | |
| Volatility (annualized) | 21.6% | 14.1% | |
| Max Drawdown | -82.9% | -34.3% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jun 12, 2000 | Sep 7, 2010 |
IYG vs VOO Performance
iShares US Financial Services ETF (IYG) is a ETF from iShares by BlackRock (US) and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year IYG returned +10.84% while VOO returned +20.92%. Year to date, IYG is up 3.63% versus a gain of 12.25% for VOO.
Over three years, IYG compounded at +23.30% per year against +21.79% for VOO; over five years the annualized figures are +10.56% and +13.05% respectively. Across the full 16-year window we track, VOO has the edge at +13.45% annualized vs +5.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IYG has been the more volatile fund, with annualized monthly volatility of 21.6% compared with 14.1% for VOO. 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 -82.9% for IYG and -34.3% for VOO. 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 0.83. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IYG charges 0.38% per year while VOO charges 0.03%. On a $10,000 position that is $38 vs $3 annually, a gap of $35 per year that compounds over a long holding period. On income, IYG currently yields 1.03% against 1.08% for VOO.
Holdings Overlap
IYG and VOO share 45 holdings out of 561 unique holdings combined, representing a 8.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IYG or VOO?
IYG has an expense ratio of 0.38% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $35 per year of difference.
Which performed better, IYG or VOO?
Over the past year IYG returned +10.84% vs +20.92% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (16 years), IYG annualized +5.27% vs +13.45% for VOO. Past performance does not guarantee future results.
Which is riskier, IYG or VOO?
IYG has been the more volatile fund at 21.6% annualized versus 14.1% for VOO. Worst drawdown: IYG -82.9% vs VOO -34.3%.
Should I hold both IYG and VOO?
IYG and VOO have a monthly-return correlation of 0.83, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IYG and VOO?
IYG and VOO share 45 common holdings with a 8.3% weight overlap. Combined, they hold 561 unique securities.
Which pays a higher dividend, IYG or VOO?
IYG yields 1.03% while VOO yields 1.08%, so VOO currently pays the higher dividend yield.
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