VTIP vs VYM
VTIP vs VYM
Vanguard Short-Term Inflation-Protected Securities ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VTIP has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | VTIP | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $19.3B | $79.0B | |
| Dividend Yield | 3.60% | 2.86% | |
| Holdings | 27 | 568 | |
| YTD Return | +1.87% | +15.80% | |
| 1Y Return | +3.01% | +26.12% | |
| 3Y Return (annualized) | +5.37% | +18.25% | |
| 5Y Return (annualized) | +3.39% | +12.51% | |
| Volatility (annualized) | 2.4% | 14.6% | |
| Max Drawdown | -7.1% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Oct 12, 2012 | Nov 10, 2006 |
VTIP vs VYM Performance
Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VTIP returned +3.01% while VYM returned +26.12%. Year to date, VTIP is up 1.87% versus a gain of 15.80% for VYM.
Over three years, VTIP compounded at +5.37% per year against +18.25% for VYM; over five years the annualized figures are +3.39% and +12.51% respectively. Across the full 14-year window we track, VYM has the edge at +7.07% annualized vs +1.58%. 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 2.4% for VTIP. 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 -7.1% for VTIP 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
VTIP 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, VTIP currently yields 3.60% against 2.86% for VYM.
Holdings Overlap
VTIP and VYM share 0 holdings out of 581 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, VTIP or VYM?
VTIP has an expense ratio of 0.03% while VYM charges 0.04%. VTIP is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VTIP or VYM?
Over the past year VTIP returned +3.01% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (14 years), VTIP annualized +1.58% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, VTIP or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.4% for VTIP. Worst drawdown: VTIP -7.1% vs VYM -58.8%.
Should I hold both VTIP and VYM?
VTIP 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 VTIP and VYM?
VTIP and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 581 unique securities.
Which pays a higher dividend, VTIP or VYM?
VTIP yields 3.60% while VYM yields 2.86%, so VTIP currently pays the higher dividend yield.
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