VAW vs. IYM

Last updated Jul 14, 2026

VAW (Vanguard Materials ETF) and IYM (iShares U.S. Basic Materials ETF) are both Materials funds - VAW tracks the MSCI US Investable Market Materials 25/50 Index while IYM tracks the Dow Jones U.S. Basic Materials Index. Both are passively managed. Over the past 10 years, VAW returned 9.51%/yr vs 10.04%/yr for IYM. With a 0.97 correlation, they move nearly in lockstep. VAW charges 0.09%/yr vs 0.42%/yr for IYM.

Performance

VAW vs. IYM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Materials ETF (VAW) and iShares U.S. Basic Materials ETF (IYM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VAW achieves a 9.06% return, which is significantly lower than IYM's 15.42% return. Over the past 10 years, VAW has underperformed IYM with an annualized return of 9.51%, while IYM has yielded a comparatively higher 10.04% annualized return.

VAW

• 1D: -0.89%
• 1M: -4.09%
• 6M: 0.88%
• YTD: 9.06%
• 1Y: 12.74%
• 3Y*: 8.73%
• 5Y*: 6.35%
• 10Y*: 9.51%

IYM

• 1D: -0.83%
• 1M: -5.70%
• 6M: 6.55%
• YTD: 15.42%
• 1Y: 23.64%
• 3Y*: 11.32%
• 5Y*: 8.16%
• 10Y*: 10.04%

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

VAW vs. IYM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VAW Vanguard Materials ETF	9.06%	12.30%	0.48%	13.67%	-11.80%	27.43%	19.44%	23.53%	-17.49%	23.76%
IYM iShares U.S. Basic Materials ETF	15.42%	20.41%	-4.54%	12.83%	-9.15%	25.62%	17.87%	19.22%	-16.63%	24.83%

Correlation

The correlation between VAW and IYM is 0.96 - 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	0.96
Correlation (3Y) Calculated over the trailing 3-year period	0.96
Correlation (5Y) Calculated over the trailing 5-year period	0.97
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	0.98

The correlation between VAW and IYM has been stable across timeframes, ranging from 0.96 to 0.98 - a consistent structural relationship.

VAW vs. IYM - Sectors Allocation Comparison

Sectors	VAW	IYM
Basic Materials	90.1%	84.2%
Consumer Cyclical	8.3%	3.3%
Industrials	1.1%	12.3%
Healthcare	0.5%	-
Technology	0.1%	-
Consumer Defensive	0.0%	-
Energy	0.0%	-
Communication Services	-	-
Financial Services	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

VAW vs. IYM — Risk / Return Rank

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

VAW

VAW Risk / Return Rank: 24
VAW Sharpe Ratio Rank: 24
VAW Sortino Ratio Rank: 23
VAW Omega Ratio Rank: 22
VAW Calmar Ratio Rank: 25
VAW Martin Ratio Rank: 27

IYM

IYM Risk / Return Rank: 42
IYM Sharpe Ratio Rank: 42
IYM Sortino Ratio Rank: 40
IYM Omega Ratio Rank: 38
IYM Calmar Ratio Rank: 43
IYM Martin Ratio Rank: 47

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.

VAW vs. IYM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Materials ETF (VAW) and iShares U.S. Basic Materials ETF (IYM). 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.

	VAW	IYM	Difference
Sharpe ratio: Return per unit of total volatility	0.69	1.20	-0.51
Sortino ratio: Return per unit of downside risk	1.07	1.70	-0.63
Omega ratio: Gain probability vs. loss probability	1.13	1.21	-0.08
Calmar ratio: Return relative to maximum drawdown	0.95	1.74	-0.79
Martin ratio: Return relative to average drawdown	2.89	6.21	-3.32

VAW vs. IYM - Sharpe Ratio Comparison

The current VAW Sharpe Ratio is 0.69, which is lower than the IYM Sharpe Ratio of 1.20. The chart below compares the historical Sharpe Ratios of VAW and IYM, 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

VAW vs. IYM - Drawdown Comparison

The maximum VAW drawdown since its inception was -62.17%, smaller than the maximum IYM drawdown of -67.78%. Use the drawdown chart below to compare losses from any high point for VAW and IYM.

Drawdown Indicators

	VAW	IYM	Difference
Max Drawdown Largest peak-to-trough decline	-62.17%	-67.78%	+5.61%
Max Drawdown (1Y) Largest decline over 1 year	-13.42%	-13.61%	+0.19%
Max Drawdown (3Y) Largest decline over 3 years	-23.21%	-23.62%	+0.41%
Max Drawdown (5Y) Largest decline over 5 years	-25.50%	-29.94%	+4.44%
Max Drawdown (10Y) Largest decline over 10 years	-41.13%	-42.76%	+1.63%
Current Drawdown Current decline from peak	-7.28%	-6.49%	-0.79%
Average Drawdown Average peak-to-trough decline	-9.61%	-11.42%	+1.81%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.42%	3.82%	+0.60%

Volatility

VAW vs. IYM - Volatility Comparison

Vanguard Materials ETF (VAW) and iShares U.S. Basic Materials ETF (IYM) have volatilities of 6.47% and 6.56%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VAW	IYM	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.47%	6.56%	-0.09%
Volatility (6M) Calculated over the trailing 6-month period	14.92%	15.85%	-0.93%
Volatility (1Y) Calculated over the trailing 1-year period	18.66%	19.89%	-1.23%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.75%	20.52%	-0.77%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.19%	21.69%	-0.50%

VAW vs. IYM - Expense Ratio Comparison

VAW has a 0.09% expense ratio, which is lower than IYM's 0.42% expense ratio.

Dividends

VAW vs. IYM - Dividend Comparison

VAW's dividend yield for the trailing twelve months is around 1.41%, more than IYM's 1.32% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IYM iShares U.S. Basic Materials ETF	1.32%	1.51%	1.65%	1.77%	2.14%	1.48%	1.39%	2.08%	1.68%	1.43%	1.47%	2.04%
VAW Vanguard Materials ETF	1.41%	1.55%	1.70%	1.72%	1.98%	1.44%	1.67%	1.94%	2.03%	1.63%	1.67%	2.30%

Frequently Asked Questions

Can I hold both VAW and IYM in my portfolio?

With a correlation of 0.96, VAW and IYM 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, VAW or IYM?

IYM has higher volatility (6.56%) compared to VAW (6.47%). In terms of maximum drawdown, VAW dropped -62.17% vs IYM's -67.78%.

Which ETF is better, VAW or IYM?

On 10-year performance, IYM leads with 10.04% vs 9.51% for VAW. On fees, VAW is cheaper at 0.09% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VAW or IYM?

Over the 10-year period, IYM has performed better with a 10.04% return vs 9.51%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VAW or IYM?

VAW is cheaper with a 0.09% expense ratio, compared with 0.42% for IYM.

Which ETF pays a higher dividend yield, VAW or IYM?

VAW has the higher dividend yield at 1.41%, compared with 1.32% for IYM.

What is the main difference between VAW and IYM?

VAW tracks MSCI US Investable Market Materials 25/50 Index, while IYM tracks Dow Jones U.S. Basic Materials Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.09% for VAW and 0.42% for IYM.

Which has better risk-adjusted returns?

IYM currently has the higher Sharpe Ratio (1.20 vs 0.69), 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.