TLT vs VYM
iShares 20+ Year Treasury 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 616 holdings.
Side-by-Side Comparison
| Metric | TLT | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.04% | |
| AUM | $45.8B | $81.6B | |
| Dividend Yield | 4.72% | 2.24% | |
| Holdings | 48 | 616 | |
| YTD Return | -2.59% | +15.42% | |
| 1Y Return | -0.53% | +22.36% | |
| 3Y Return (annualized) | -0.18% | +19.06% | |
| 5Y Return (annualized) | -7.83% | +12.20% | |
| Volatility (annualized) | 13.4% | 14.6% | |
| Max Drawdown | -48.7% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Nov 10, 2006 |
TLT vs VYM Performance
iShares 20+ Year Treasury Bond ETF (TLT) 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 TLT returned -0.53% while VYM returned +22.36%. Year to date, TLT is down 2.59% versus a gain of 15.42% for VYM.
Over three years, TLT compounded at -0.18% per year against +19.06% for VYM; over five years the annualized figures are -7.83% and +12.20% respectively. Across the full 20-year window we track, VYM has the edge at +7.04% annualized vs +0.82%. 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 13.4% for TLT. 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 -48.7% for TLT 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 -0.08. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TLT charges 0.15% per year while VYM charges 0.04%. On a $10,000 position that is $15 vs $4 annually, a gap of $11 per year that compounds over a long holding period. On income, TLT currently yields 4.72% against 2.24% for VYM.
Holdings Overlap
TLT and VYM share 0 holdings out of 647 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, TLT or VYM?
TLT has an expense ratio of 0.15% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $11 per year of difference.
Which performed better, TLT or VYM?
Over the past year TLT returned -0.53% vs +22.36% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), TLT annualized +0.82% vs +7.04% for VYM. Past performance does not guarantee future results.
Which is riskier, TLT or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 13.4% for TLT. Worst drawdown: TLT -48.7% vs VYM -58.8%.
Should I hold both TLT and VYM?
TLT and VYM have a monthly-return correlation of -0.08, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TLT and VYM?
TLT and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 647 unique securities.
Which pays a higher dividend, TLT or VYM?
TLT yields 4.72% while VYM yields 2.24%, so TLT currently pays the higher dividend yield.
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