IYR vs VYM
iShares US Real Estate 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 558 holdings.
Side-by-Side Comparison
| Metric | IYR | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.38% | 0.04% | |
| AUM | $4.8B | $79.0B | |
| Dividend Yield | 2.21% | 2.86% | |
| Holdings | 65 | 568 | |
| YTD Return | +12.46% | +16.78% | |
| 1Y Return | +12.53% | +24.43% | |
| 3Y Return (annualized) | +9.85% | +18.60% | |
| 5Y Return (annualized) | +2.17% | +12.30% | |
| Volatility (annualized) | 19.8% | 14.6% | |
| Max Drawdown | -76.5% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jun 12, 2000 | Nov 10, 2006 |
IYR vs VYM Performance
iShares US Real Estate ETF (IYR) 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 IYR returned +12.53% while VYM returned +24.43%. Year to date, IYR is up 12.46% versus a gain of 16.78% for VYM.
Over three years, IYR compounded at +9.85% per year against +18.60% for VYM; over five years the annualized figures are +2.17% and +12.30% respectively. Across the full 20-year window we track, VYM has the edge at +7.11% annualized vs +4.83%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IYR has been the more volatile fund, with annualized monthly volatility of 19.8% 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 -76.5% for IYR 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 0.78. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IYR 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, IYR currently yields 2.21% against 2.86% for VYM.
Holdings Overlap
IYR and VYM share 0 holdings out of 620 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, IYR or VYM?
IYR 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, IYR or VYM?
Over the past year IYR returned +12.53% vs +24.43% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), IYR annualized +4.83% vs +7.11% for VYM. Past performance does not guarantee future results.
Which is riskier, IYR or VYM?
IYR has been the more volatile fund at 19.8% annualized versus 14.6% for VYM. Worst drawdown: IYR -76.5% vs VYM -58.8%.
Should I hold both IYR and VYM?
IYR and VYM have a monthly-return correlation of 0.78, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IYR and VYM?
IYR and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 620 unique securities.
Which pays a higher dividend, IYR or VYM?
IYR yields 2.21% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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