IYG vs VYM
iShares US Financial Services ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 568 holdings.
Side-by-Side Comparison
| Metric | IYG | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.38% | 0.04% | |
| AUM | $2.1B | $79.0B | |
| Dividend Yield | 1.09% | 2.86% | |
| Holdings | 104 | 568 | |
| YTD Return | +6.41% | +16.78% | |
| 1Y Return | +13.59% | +24.43% | |
| 3Y Return (annualized) | +23.11% | +18.60% | |
| 5Y Return (annualized) | +10.55% | +12.30% | |
| Volatility (annualized) | 21.6% | 14.6% | |
| Max Drawdown | -82.9% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jun 12, 2000 | Nov 10, 2006 |
IYG vs VYM Performance
iShares US Financial Services ETF (IYG) 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 IYG returned +13.59% while VYM returned +24.43%. Year to date, IYG is up 6.41% versus a gain of 16.78% for VYM.
Over three years, IYG compounded at +23.11% per year against +18.60% for VYM; over five years the annualized figures are +10.55% and +12.30% respectively. Across the full 20-year window we track, VYM has the edge at +7.11% annualized vs +5.38%. 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 14.6% 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 -82.9% for IYG 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 0.86. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IYG charges 0.38% per year while VYM charges 0.04%. On a $10,000 position that is $38 vs $4 annually, a gap of $34 per year that compounds over a long holding period. On income, IYG currently yields 1.09% against 2.86% for VYM.
Holdings Overlap
IYG and VYM share 63 holdings out of 596 unique holdings combined, representing a 14.6% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IYG or VYM?
IYG has an expense ratio of 0.38% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $34 per year of difference.
Which performed better, IYG or VYM?
Over the past year IYG returned +13.59% vs +24.43% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), IYG annualized +5.38% vs +7.11% for VYM. Past performance does not guarantee future results.
Which is riskier, IYG or VYM?
IYG has been the more volatile fund at 21.6% annualized versus 14.6% for VYM. Worst drawdown: IYG -82.9% vs VYM -58.8%.
Should I hold both IYG and VYM?
IYG and VYM have a monthly-return correlation of 0.86, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IYG and VYM?
IYG and VYM share 63 common holdings with a 14.6% weight overlap. Combined, they hold 596 unique securities.
Which pays a higher dividend, IYG or VYM?
IYG yields 1.09% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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