IEF vs VYM
IEF vs VYM
iShares 7-10 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 558 holdings.
Side-by-Side Comparison
| Metric | IEF | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.04% | |
| AUM | $47.3B | $79.0B | |
| Dividend Yield | 3.88% | 2.86% | |
| Holdings | 15 | 568 | |
| YTD Return | -0.98% | +15.45% | |
| 1Y Return | +0.94% | +26.05% | |
| 3Y Return (annualized) | +3.50% | +17.96% | |
| 5Y Return (annualized) | -1.49% | +12.54% | |
| Volatility (annualized) | 6.6% | 14.6% | |
| Max Drawdown | -23.9% | -58.8% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Nov 10, 2006 |
IEF vs VYM Performance
iShares 7-10 Year Treasury Bond ETF (IEF) 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 IEF returned +0.94% while VYM returned +26.05%. Year to date, IEF is down 0.98% versus a gain of 15.45% for VYM.
Over three years, IEF compounded at +3.50% per year against +17.96% for VYM; over five years the annualized figures are -1.49% and +12.54% respectively. Across the full 20-year window we track, VYM has the edge at +7.06% annualized vs +3.35%. 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 6.6% for IEF. 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 -23.9% for IEF 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 -0.07. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IEF 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, IEF currently yields 3.88% against 2.86% for VYM.
Holdings Overlap
IEF and VYM share 0 holdings out of 570 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, IEF or VYM?
IEF 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, IEF or VYM?
Over the past year IEF returned +0.94% vs +26.05% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), IEF annualized +3.35% vs +7.06% for VYM. Past performance does not guarantee future results.
Which is riskier, IEF or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 6.6% for IEF. Worst drawdown: IEF -23.9% vs VYM -58.8%.
Should I hold both IEF and VYM?
IEF and VYM have a monthly-return correlation of -0.07, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IEF and VYM?
IEF and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 570 unique securities.
Which pays a higher dividend, IEF or VYM?
IEF yields 3.88% while VYM yields 2.86%, so IEF currently pays the higher dividend yield.
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