STIP vs VYM
iShares 0-5 Year TIPS Bond ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
STIP has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | STIP | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $15.9B | $79.0B | |
| Dividend Yield | 4.32% | 2.86% | |
| Holdings | 27 | 568 | |
| YTD Return | +1.15% | +16.10% | |
| 1Y Return | +2.23% | +25.99% | |
| 3Y Return (annualized) | +4.83% | +18.29% | |
| 5Y Return (annualized) | +3.01% | +12.35% | |
| Volatility (annualized) | 2.2% | 14.6% | |
| Max Drawdown | -6.9% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Dec 1, 2010 | Nov 10, 2006 |
STIP vs VYM Performance
iShares 0-5 Year TIPS Bond ETF (STIP) 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 STIP returned +2.23% while VYM returned +25.99%. Year to date, STIP is up 1.15% versus a gain of 16.10% for VYM.
Over three years, STIP compounded at +4.83% per year against +18.29% for VYM; over five years the annualized figures are +3.01% and +12.35% respectively. Across the full 16-year window we track, VYM has the edge at +7.08% annualized vs +1.51%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 2.2% for STIP. 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 -6.9% for STIP 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 0.44. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
STIP charges 0.03% per year while VYM charges 0.04%. On a $10,000 position that is $3 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, STIP currently yields 4.32% against 2.86% for VYM.
Holdings Overlap
STIP and VYM share 0 holdings out of 582 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, STIP or VYM?
STIP has an expense ratio of 0.03% while VYM charges 0.04%. STIP is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, STIP or VYM?
Over the past year STIP returned +2.23% vs +25.99% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (16 years), STIP annualized +1.51% vs +7.08% for VYM. Past performance does not guarantee future results.
Which is riskier, STIP or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.2% for STIP. Worst drawdown: STIP -6.9% vs VYM -58.8%.
Should I hold both STIP and VYM?
STIP and VYM have a monthly-return correlation of 0.44, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between STIP and VYM?
STIP and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 582 unique securities.
Which pays a higher dividend, STIP or VYM?
STIP yields 4.32% while VYM yields 2.86%, so STIP currently pays the higher dividend yield.
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