TIP vs VOO
TIP vs VOO
iShares TIPS Bond 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 505 holdings.
Side-by-Side Comparison
| Metric | TIP | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.03% | |
| AUM | $14.5B | $979.0B | |
| Dividend Yield | 3.77% | 1.09% | |
| Holdings | 50 | 509 | |
| YTD Return | +0.07% | +13.80% | |
| 1Y Return | +1.04% | +23.71% | |
| 3Y Return (annualized) | +3.48% | +21.50% | |
| 5Y Return (annualized) | +0.22% | +13.44% | |
| Volatility (annualized) | 5.7% | 14.1% | |
| Max Drawdown | -18.6% | -34.3% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Dec 4, 2003 | Sep 7, 2010 |
TIP vs VOO Performance
iShares TIPS Bond ETF (TIP) 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 TIP returned +1.04% while VOO returned +23.71%. Year to date, TIP is up 0.07% versus a gain of 13.80% for VOO.
Over three years, TIP compounded at +3.48% per year against +21.50% for VOO; over five years the annualized figures are +0.22% and +13.44% respectively. Across the full 16-year window we track, VOO has the edge at +13.58% annualized vs +1.21%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.1% compared with 5.7% for TIP. 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 -18.6% for TIP 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 0.39. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TIP charges 0.18% per year while VOO charges 0.03%. On a $10,000 position that is $18 vs $3 annually, a gap of $15 per year that compounds over a long holding period. On income, TIP currently yields 3.77% against 1.09% for VOO.
Holdings Overlap
TIP and VOO share 0 holdings out of 546 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, TIP or VOO?
TIP has an expense ratio of 0.18% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $15 per year of difference.
Which performed better, TIP or VOO?
Over the past year TIP returned +1.04% vs +23.71% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (16 years), TIP annualized +1.21% vs +13.58% for VOO. Past performance does not guarantee future results.
Which is riskier, TIP or VOO?
VOO has been the more volatile fund at 14.1% annualized versus 5.7% for TIP. Worst drawdown: TIP -18.6% vs VOO -34.3%.
Should I hold both TIP and VOO?
TIP and VOO have a monthly-return correlation of 0.39, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TIP and VOO?
TIP and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 546 unique securities.
Which pays a higher dividend, TIP or VOO?
TIP yields 3.77% while VOO yields 1.09%, so TIP currently pays the higher dividend yield.
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