TIP vs VYM
TIP vs VYM
iShares TIPS Bond 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 | TIP | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.04% | |
| AUM | $14.5B | $79.0B | |
| Dividend Yield | 3.77% | 2.86% | |
| Holdings | 50 | 568 | |
| YTD Return | +0.07% | +15.80% | |
| 1Y Return | +1.04% | +26.12% | |
| 3Y Return (annualized) | +3.48% | +18.25% | |
| 5Y Return (annualized) | +0.22% | +12.51% | |
| Volatility (annualized) | 5.7% | 14.6% | |
| Max Drawdown | -18.6% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Dec 4, 2003 | Nov 10, 2006 |
TIP vs VYM Performance
iShares TIPS Bond ETF (TIP) 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 TIP returned +1.04% while VYM returned +26.12%. Year to date, TIP is up 0.07% versus a gain of 15.80% for VYM.
Over three years, TIP compounded at +3.48% per year against +18.25% for VYM; over five years the annualized figures are +0.22% and +12.51% respectively. Across the full 20-year window we track, VYM has the edge at +7.07% annualized vs +1.21%. 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 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 -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 0.29. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TIP charges 0.18% per year while VYM charges 0.04%. On a $10,000 position that is $18 vs $4 annually, a gap of $14 per year that compounds over a long holding period. On income, TIP currently yields 3.77% against 2.86% for VYM.
Holdings Overlap
TIP and VYM share 0 holdings out of 599 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 VYM?
TIP has an expense ratio of 0.18% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $14 per year of difference.
Which performed better, TIP or VYM?
Over the past year TIP returned +1.04% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), TIP annualized +1.21% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, TIP or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 5.7% for TIP. Worst drawdown: TIP -18.6% vs VYM -58.8%.
Should I hold both TIP and VYM?
TIP and VYM have a monthly-return correlation of 0.29, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TIP and VYM?
TIP and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 599 unique securities.
Which pays a higher dividend, TIP or VYM?
TIP yields 3.77% while VYM yields 2.86%, so TIP currently pays the higher dividend yield.
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