IYG vs VTI
iShares US Financial Services ETF vs Vanguard Morningstar Total Stock Market ETF
Quick Verdict
VTI has a lower expense ratio. VTI delivered stronger 1-year returns. VTI offers more diversification with 3,543 holdings.
Side-by-Side Comparison
| Metric | IYG | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 0.38% | 0.03% | |
| AUM | $2.2B | $666.9B | |
| Dividend Yield | 1.03% | 1.07% | |
| Holdings | 104 | 3,543 | |
| YTD Return | +4.75% | +13.14% | |
| 1Y Return | +12.35% | +22.35% | |
| 3Y Return (annualized) | +24.24% | +21.83% | |
| 5Y Return (annualized) | +10.57% | +12.01% | |
| Volatility (annualized) | 21.6% | 15.3% | |
| Max Drawdown | -82.9% | -56.6% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jun 12, 2000 | May 24, 2001 |
IYG vs VTI Performance
iShares US Financial Services ETF (IYG) 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 IYG returned +12.35% while VTI returned +22.35%. Year to date, IYG is up 4.75% versus a gain of 13.14% for VTI.
Over three years, IYG compounded at +24.24% per year against +21.83% for VTI; over five years the annualized figures are +10.57% and +12.01% respectively. Across the full 25-year window we track, VTI has the edge at +8.09% annualized vs +5.31%. 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 15.3% for VTI. 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 -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 0.84. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IYG charges 0.38% per year while VTI 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 1.07% for VTI.
Holdings Overlap
IYG and VTI share 79 holdings out of 2809 unique holdings combined, representing a 7.6% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IYG or VTI?
IYG has an expense ratio of 0.38% while VTI charges 0.03%. VTI is the cheaper option. On a $10,000 investment, that is $35 per year of difference.
Which performed better, IYG or VTI?
Over the past year IYG returned +12.35% vs +22.35% for VTI, so VTI leads on 1-year performance. Over the longest common window we track (25 years), IYG annualized +5.31% vs +8.09% for VTI. Past performance does not guarantee future results.
Which is riskier, IYG or VTI?
IYG has been the more volatile fund at 21.6% annualized versus 15.3% for VTI. Worst drawdown: IYG -82.9% vs VTI -56.6%.
Should I hold both IYG and VTI?
IYG and VTI have a monthly-return correlation of 0.84, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IYG and VTI?
IYG and VTI share 79 common holdings with a 7.6% weight overlap. Combined, they hold 2809 unique securities.
Which pays a higher dividend, IYG or VTI?
IYG yields 1.03% while VTI yields 1.07%, so VTI currently pays the higher dividend yield.
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