VFH vs. IAI

Last updated Jun 4, 2026

VFH (Vanguard Financials ETF) and IAI (iShares U.S. Broker-Dealers & Securities Exchanges ETF) are both Financials Equities funds - VFH tracks the MSCI US Investable Market Financials 25/50 Index while IAI tracks the DJ US Select / Investment Services. Both are passively managed. Over the past 10 years, VFH returned 12.20%/yr vs 18.46%/yr for IAI. Their correlation of 0.89 suggests significant overlap in exposure. VFH charges 0.10%/yr vs 0.41%/yr for IAI.

Performance

VFH vs. IAI - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Financials ETF (VFH) and iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VFH achieves a -6.40% return, which is significantly lower than IAI's 0.24% return. Over the past 10 years, VFH has underperformed IAI with an annualized return of 12.20%, while IAI has yielded a comparatively higher 18.46% annualized return.

VFH

• 1D: -1.39%
• 1M: -1.74%
• YTD: -6.40%
• 6M: -3.96%
• 1Y: 2.39%
• 3Y*: 18.44%
• 5Y*: 7.83%
• 10Y*: 12.20%

IAI

• 1D: -1.71%
• 1M: 1.75%
• YTD: 0.24%
• 6M: 1.73%
• 1Y: 16.52%
• 3Y*: 27.84%
• 5Y*: 13.43%
• 10Y*: 18.46%

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

VFH vs. IAI - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFH Vanguard Financials ETF	-6.40%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%
IAI iShares U.S. Broker-Dealers & Securities Exchanges ETF	0.24%	25.80%	34.37%	15.27%	-10.87%	40.48%	18.61%	24.26%	-9.47%	28.86%

Correlation

The correlation between VFH and IAI is 0.78, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.78
Correlation (3Y) Calculated over the trailing 3-year period	0.84
Correlation (5Y) Calculated over the trailing 5-year period	0.88
Correlation (10Y) Calculated over the trailing 10-year period	0.89
Correlation (All Time) Calculated using the full available price history since May 8, 2006	0.89

The correlation between VFH and IAI shifts across timeframes, from 0.78 (1 year) to 0.89 (all time), reflecting how their relationship changes across market environments.

VFH vs. IAI - Sectors Allocation Comparison

Sectors	VFH	IAI
Financial Services	96.8%	99.9%
Technology	2.1%	0.1%
Real Estate	0.8%	-
Industrials	0.2%	-
Healthcare	0.1%	-
Communication Services	0.0%	-
Consumer Cyclical	0.0%	-
Basic Materials	-	-
Consumer Defensive	-	-
Energy	-	-
Utilities	-	-

Return for Risk

VFH vs. IAI — Risk / Return Rank

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

VFH

VFH Risk / Return Rank: 10
VFH Sharpe Ratio Rank: 11
VFH Sortino Ratio Rank: 10
VFH Omega Ratio Rank: 10
VFH Calmar Ratio Rank: 10
VFH Martin Ratio Rank: 10

IAI

IAI Risk / Return Rank: 23
IAI Sharpe Ratio Rank: 24
IAI Sortino Ratio Rank: 23
IAI Omega Ratio Rank: 23
IAI Calmar Ratio Rank: 22
IAI Martin Ratio Rank: 23

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.

VFH vs. IAI - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Financials ETF (VFH) and iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). 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.

	VFH	IAI	Difference
Sharpe ratio: Return per unit of total volatility	0.16	0.87	-0.71
Sortino ratio: Return per unit of downside risk	0.32	1.27	-0.95
Omega ratio: Gain probability vs. loss probability	1.04	1.16	-0.12
Calmar ratio: Return relative to maximum drawdown	0.16	1.00	-0.84
Martin ratio: Return relative to average drawdown	0.43	2.88	-2.45
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VFH vs. IAI - Sharpe Ratio Comparison

The current VFH Sharpe Ratio is 0.16, which is lower than the IAI Sharpe Ratio of 0.87. The chart below compares the historical Sharpe Ratios of VFH and IAI, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VFH	IAI	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.16	0.87	-0.71
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.41	0.63	-0.22
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.54	0.81	-0.27
Sharpe Ratio (All Time) Calculated using the full available price history	0.24	0.28	-0.04

Drawdowns

VFH vs. IAI - Drawdown Comparison

The maximum VFH drawdown since its inception was -78.61%, roughly equal to the maximum IAI drawdown of -75.46%. Use the drawdown chart below to compare losses from any high point for VFH and IAI.

Drawdown Indicators

	VFH	IAI	Difference
Max Drawdown Largest peak-to-trough decline	-78.61%	-75.46%	-3.15%
Max Drawdown (1Y) Largest decline over 1 year	-14.75%	-16.52%	+1.77%
Max Drawdown (3Y) Largest decline over 3 years	-17.30%	-23.14%	+5.84%
Max Drawdown (5Y) Largest decline over 5 years	-25.66%	-28.84%	+3.18%
Max Drawdown (10Y) Largest decline over 10 years	-44.42%	-40.38%	-4.04%
Current Drawdown Current decline from peak	-9.24%	-5.57%	-3.67%
Average Drawdown Average peak-to-trough decline	-18.54%	-22.66%	+4.12%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.55%	5.75%	-0.20%

Volatility

VFH vs. IAI - Volatility Comparison

The current volatility for Vanguard Financials ETF (VFH) is 3.34%, while iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) has a volatility of 4.48%. This indicates that VFH experiences smaller price fluctuations and is considered to be less risky than IAI based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFH	IAI	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.34%	4.48%	-1.14%
Volatility (6M) Calculated over the trailing 6-month period	11.10%	14.92%	-3.82%
Volatility (1Y) Calculated over the trailing 1-year period	14.79%	19.05%	-4.26%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.31%	21.42%	-2.11%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.54%	22.84%	-0.30%

VFH vs. IAI - Expense Ratio Comparison

VFH has a 0.10% expense ratio, which is lower than IAI's 0.41% expense ratio.

Dividends

VFH vs. IAI - Dividend Comparison

VFH's dividend yield for the trailing twelve months is around 1.56%, more than IAI's 1.08% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IAI iShares U.S. Broker-Dealers & Securities Exchanges ETF	1.08%	0.95%	1.05%	1.80%	2.14%	1.31%	1.55%	1.52%	1.58%	1.37%	1.49%	1.31%
VFH Vanguard Financials ETF	1.56%	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 VFH and IAI in my portfolio?

VFH and IAI have a correlation of 0.78, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VFH or IAI?

IAI has higher volatility (4.48%) compared to VFH (3.34%). In terms of maximum drawdown, VFH dropped -78.61% vs IAI's -75.46%.

Which ETF is better, VFH or IAI?

On 10-year performance, IAI leads with 18.46% vs 12.20% for VFH. On fees, VFH is cheaper at 0.10% per year. On volatility, VFH has been the lower-risk option at 3.34%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VFH or IAI?

Over the 10-year period, IAI has performed better with a 18.46% return vs 12.20%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VFH or IAI?

VFH is cheaper with a 0.10% expense ratio, compared with 0.41% for IAI.

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

VFH has the higher dividend yield at 1.56%, compared with 1.08% for IAI.

What is the main difference between VFH and IAI?

VFH tracks MSCI US Investable Market Financials 25/50 Index, while IAI tracks DJ US Select / Investment Services. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.10% for VFH and 0.41% for IAI.

Which has better risk-adjusted returns?

IAI currently has the higher Sharpe Ratio (0.87 vs 0.16), 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.