IYG vs. VFH

Last updated Jun 23, 2026

IYG (iShares U.S. Financial Services ETF) and VFH (Vanguard Financials ETF) are both Financials Equities funds - IYG tracks the Dow Jones U.S. Financial Services TR while VFH tracks the MSCI US Investable Market Financials 25/50 Index. Both are passively managed. Over the past 10 years, IYG returned 15.04%/yr vs 13.46%/yr for VFH. With a 0.97 correlation, they move nearly in lockstep. IYG charges 0.42%/yr vs 0.09%/yr for VFH.

Performance

IYG vs. VFH - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares U.S. Financial Services ETF (IYG) and Vanguard Financials ETF (VFH). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, IYG achieves a -0.62% return, which is significantly higher than VFH's -0.69% return. Over the past 10 years, IYG has outperformed VFH with an annualized return of 15.04%, while VFH has yielded a comparatively lower 13.46% annualized return.

IYG

• 1D: 0.54%
• 1M: 4.38%
• YTD: -0.62%
• 6M: -1.80%
• 1Y: 13.04%
• 3Y*: 23.09%
• 5Y*: 10.06%
• 10Y*: 15.04%

VFH

• 1D: 0.54%
• 1M: 3.75%
• YTD: -0.69%
• 6M: -1.93%
• 1Y: 9.84%
• 3Y*: 20.85%
• 5Y*: 10.29%
• 10Y*: 13.46%

*Multi-year figures are annualized to reflect compound growth (CAGR)

IYG vs. VFH - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
IYG iShares U.S. Financial Services ETF	-0.62%	19.85%	31.94%	16.07%	-16.76%	30.36%	0.99%	37.62%	-12.56%	24.47%
VFH Vanguard Financials ETF	-0.69%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%

Correlation

The correlation between IYG and VFH is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.98
Correlation (3Y) Calculated over the trailing 3-year period	0.99
Correlation (5Y) Calculated over the trailing 5-year period	0.98
Correlation (10Y) Calculated over the trailing 10-year period	0.98
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.97

The correlation between IYG and VFH has been stable across timeframes, ranging from 0.97 to 0.99 - a consistent structural relationship.

IYG vs. VFH - Sectors Allocation Comparison

Sectors	IYG	VFH
Financial Services	100.0%	96.8%
Basic Materials	-	-
Communication Services	-	0.0%
Consumer Cyclical	-	0.0%
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	0.1%
Industrials	-	0.2%
Real Estate	-	0.8%
Technology	-	2.1%
Utilities	-	-

Return for Risk

IYG vs. VFH — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

IYG

IYG Risk / Return Rank: 21
IYG Sharpe Ratio Rank: 24
IYG Sortino Ratio Rank: 22
IYG Omega Ratio Rank: 22
IYG Calmar Ratio Rank: 19
IYG Martin Ratio Rank: 19

VFH

VFH Risk / Return Rank: 18
VFH Sharpe Ratio Rank: 19
VFH Sortino Ratio Rank: 18
VFH Omega Ratio Rank: 18
VFH Calmar Ratio Rank: 16
VFH Martin Ratio Rank: 16

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

IYG vs. VFH - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares U.S. Financial Services ETF (IYG) and Vanguard Financials ETF (VFH). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	IYG	VFH	Difference
Sharpe ratio: Return per unit of total volatility	0.84	0.66	+0.18
Sortino ratio: Return per unit of downside risk	1.21	0.99	+0.23
Omega ratio: Gain probability vs. loss probability	1.15	1.12	+0.03
Calmar ratio: Return relative to maximum drawdown	0.82	0.67	+0.15
Martin ratio: Return relative to average drawdown	2.10	1.74	+0.36

IYG vs. VFH - Sharpe Ratio Comparison

The current IYG Sharpe Ratio is 0.84, which is comparable to the VFH Sharpe Ratio of 0.66. The chart below compares the historical Sharpe Ratios of IYG and VFH, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

IYG vs. VFH - Drawdown Comparison

The maximum IYG drawdown since its inception was -81.84%, roughly equal to the maximum VFH drawdown of -78.61%. Use the drawdown chart below to compare losses from any high point for IYG and VFH.

Drawdown Indicators

	IYG	VFH	Difference
Max Drawdown Largest peak-to-trough decline	-81.84%	-78.61%	-3.23%
Max Drawdown (1Y) Largest decline over 1 year	-15.90%	-14.75%	-1.15%
Max Drawdown (3Y) Largest decline over 3 years	-18.54%	-17.30%	-1.24%
Max Drawdown (5Y) Largest decline over 5 years	-29.62%	-25.66%	-3.96%
Max Drawdown (10Y) Largest decline over 10 years	-44.32%	-44.42%	+0.10%
Current Drawdown Current decline from peak	-4.08%	-3.71%	-0.37%
Average Drawdown Average peak-to-trough decline	-20.72%	-18.51%	-2.21%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.22%	5.67%	+0.55%

Volatility

IYG vs. VFH - Volatility Comparison

iShares U.S. Financial Services ETF (IYG) has a higher volatility of 4.40% compared to Vanguard Financials ETF (VFH) at 4.19%. This indicates that IYG's price experiences larger fluctuations and is considered to be riskier than VFH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	IYG	VFH	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.40%	4.19%	+0.21%
Volatility (6M) Calculated over the trailing 6-month period	12.15%	11.41%	+0.74%
Volatility (1Y) Calculated over the trailing 1-year period	15.64%	14.98%	+0.66%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.42%	19.26%	+1.16%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.54%	22.56%	+0.98%

IYG vs. VFH - Expense Ratio Comparison

IYG has a 0.42% expense ratio, which is higher than VFH's 0.09% expense ratio.

Dividends

IYG vs. VFH - Dividend Comparison

IYG's dividend yield for the trailing twelve months is around 1.08%, less than VFH's 1.47% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IYG iShares U.S. Financial Services ETF	1.08%	1.00%	1.16%	1.77%	2.07%	1.25%	1.71%	1.59%	1.81%	1.24%	1.28%	1.33%
VFH Vanguard Financials ETF	1.47%	1.55%	1.75%	2.08%	2.31%	1.87%	2.21%	2.17%	2.30%	1.53%	1.63%	2.00%

Frequently Asked Questions

Can I hold both IYG and VFH in my portfolio?

With a correlation of 0.98, IYG and VFH move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, IYG or VFH?

IYG has higher volatility (4.40%) compared to VFH (4.19%). In terms of maximum drawdown, IYG dropped -81.84% vs VFH's -78.61%.

Which ETF is better, IYG or VFH?

On 10-year performance, IYG leads with 15.04% vs 13.46% for VFH. On fees, VFH is cheaper at 0.09% per year. On volatility, VFH has been the lower-risk option at 4.19%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, IYG or VFH?

Over the 10-year period, IYG has performed better with a 15.04% return vs 13.46%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, IYG or VFH?

VFH is cheaper with a 0.09% expense ratio, compared with 0.42% for IYG.

Which ETF pays a higher dividend yield, IYG or VFH?

VFH has the higher dividend yield at 1.47%, compared with 1.08% for IYG.

What is the main difference between IYG and VFH?

IYG tracks Dow Jones U.S. Financial Services TR, while VFH tracks MSCI US Investable Market Financials 25/50 Index. They also come from different issuers: iShares and Vanguard. Their fees differ too: 0.42% for IYG and 0.09% for VFH.

Which has better risk-adjusted returns?

IYG currently has the higher Sharpe Ratio (0.84 vs 0.66), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.