TIP vs. VTIP
Compare and contrast key facts about iShares TIPS Bond ETF (TIP) and Vanguard Short-Term Inflation-Protected Securities ETF (VTIP).
TIP and VTIP are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. TIP is a passively managed fund by iShares that tracks the performance of the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L). It was launched on Dec 4, 2003. VTIP is a passively managed fund by Vanguard that tracks the performance of the Barclays Capital U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index (Series-L). It was launched on Oct 12, 2012. Both TIP and VTIP are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: TIP or VTIP.
Key characteristics
| TIP | VTIP | |
|---|---|---|
| YTD Return | -1.63% | 0.81% |
| 1Y Return | -2.03% | 3.19% |
| 3Y Return (Ann) | -1.64% | 2.23% |
| 5Y Return (Ann) | 1.88% | 3.18% |
| 10Y Return (Ann) | 1.75% | 1.99% |
| Sharpe Ratio | -0.24 | 1.34 |
| Daily Std Dev | 6.02% | 2.57% |
| Max Drawdown | -14.56% | -6.27% |
| Current Drawdown | -10.88% | -0.17% |
Correlation
The correlation between TIP and VTIP is 0.76, which is considered to be high. That indicates a strong positive relationship between their price movements. Having highly-correlated positions in a portfolio may signal a lack of diversification, potentially leading to increased risk during market downturns.
Performance
TIP vs. VTIP - Performance Comparison
In the year-to-date period, TIP achieves a -1.63% return, which is significantly lower than VTIP's 0.81% return. Over the past 10 years, TIP has underperformed VTIP with an annualized return of 1.75%, while VTIP has yielded a comparatively higher 1.99% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
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TIP vs. VTIP - Expense Ratio Comparison
TIP has a 0.19% expense ratio, which is higher than VTIP's 0.04% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Risk-Adjusted Performance
TIP vs. VTIP - Risk-Adjusted Performance Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares TIPS Bond ETF (TIP) and Vanguard Short-Term Inflation-Protected Securities ETF (VTIP). 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.
Dividends
TIP vs. VTIP - Dividend Comparison
TIP's dividend yield for the trailing twelve months is around 2.72%, less than VTIP's 3.33% yield.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
TIP iShares TIPS Bond ETF | 2.72% | 2.73% | 6.96% | 4.28% | 1.17% | 1.75% | 2.71% | 2.07% | 1.48% | 0.34% | 1.67% | 1.15% |
VTIP Vanguard Short-Term Inflation-Protected Securities ETF | 3.33% | 3.36% | 6.84% | 4.68% | 1.20% | 1.95% | 2.45% | 1.52% | 0.76% | 0.00% | 0.82% | 0.05% |
Drawdowns
TIP vs. VTIP - Drawdown Comparison
The maximum TIP drawdown since its inception was -14.56%, which is greater than VTIP's maximum drawdown of -6.27%. Use the drawdown chart below to compare losses from any high point for TIP and VTIP. For additional features, visit the drawdowns tool.
Volatility
TIP vs. VTIP - Volatility Comparison
iShares TIPS Bond ETF (TIP) has a higher volatility of 1.59% compared to Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) at 0.55%. This indicates that TIP's price experiences larger fluctuations and is considered to be riskier than VTIP based on this measure. The chart below showcases a comparison of their rolling one-month volatility.