VFH vs. IYG

Last updated Aug 5, 2026

VFH (Vanguard Financials ETF) and IYG (iShares U.S. Financial Services ETF) are both Financials Equities funds - VFH tracks the MSCI US Investable Market Financials 25/50 Index while IYG tracks the Dow Jones U.S. Financial Services TR. Both are passively managed. Over the past 10 years, VFH returned 13.37%/yr vs 14.64%/yr for IYG. Their 0.97 correlation means they have historically moved very closely together. VFH charges 0.09%/yr vs 0.42%/yr for IYG.

Performance

VFH vs. IYG - Performance Comparison

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

Returns By Period

In the year-to-date period, VFH achieves a 7.22% return, which is significantly higher than IYG's 6.15% return. Over the past 10 years, VFH has underperformed IYG with an annualized return of 13.37%, while IYG has yielded a comparatively higher 14.64% annualized return.

VFH

• 1D: 0.89%
• 1M: 4.10%
• 6M: 9.11%
• YTD: 7.22%
• 1Y: 13.83%
• 3Y*: 20.82%
• 5Y*: 11.42%
• 10Y*: 13.37%
• ALL TIME*: 7.02%

IYG

• 1D: 0.96%
• 1M: 4.27%
• 6M: 7.93%
• YTD: 6.15%
• 1Y: 14.31%
• 3Y*: 22.26%
• 5Y*: 10.92%
• 10Y*: 14.64%
• ALL TIME*: 6.76%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
IYG iShares U.S. Financial Services ETF	$7.02M	$11.44M	$10.05M
VFH Vanguard Financials ETF	$53.77M	$71.76M	$72.54M

VFH vs. IYG - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFH Vanguard Financials ETF	7.22%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%
IYG iShares U.S. Financial Services ETF	6.15%	19.85%	31.94%	16.07%	-16.76%	30.36%	0.99%	37.62%	-12.56%	24.47%

Correlation

The correlation between VFH and IYG is 0.98 - they have historically moved very closely together. At this level, their price movements offset little of one another.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.98
Correlation (3Y) Balances recent behavior with more history.	0.98
Correlation (5Y) Shows whether the relationship held over a longer period.	0.98
Correlation (10Y) Provides a long-term view across more market conditions.	0.98
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.97

The correlation between VFH and IYG has been stable across timeframes, ranging from 0.97 to 0.98 - a consistent structural relationship.

VFH vs. IYG - Sectors Allocation Comparison

Sectors	VFH	IYG
Financial Services	97.0%	100.0%
Technology	2.0%	0.0%
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. IYG — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

VFH

VFH Risk / Return Rank: 31
VFH Sharpe Ratio Rank: 34
VFH Sortino Ratio Rank: 32
VFH Omega Ratio Rank: 32
VFH Calmar Ratio Rank: 27
VFH Martin Ratio Rank: 27

IYG

IYG Risk / Return Rank: 30
IYG Sharpe Ratio Rank: 33
IYG Sortino Ratio Rank: 32
IYG Omega Ratio Rank: 32
IYG Calmar Ratio Rank: 26
IYG Martin Ratio Rank: 26

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

VFH vs. IYG - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Financials ETF (VFH) and iShares U.S. Financial Services ETF (IYG). 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.

	VFH	IYG	Difference
Sharpe ratio: Return per unit of total volatility	0.93	0.91	+0.02
Sortino ratio: Return per unit of downside risk	1.34	1.31	+0.03
Omega ratio: Gain probability vs. loss probability	1.17	1.17	0.00
Calmar ratio: Return relative to maximum drawdown	0.94	0.90	+0.04
Martin ratio: Return relative to average drawdown	2.45	2.30	+0.15

VFH vs. IYG - Sharpe Ratio Comparison

The current VFH Sharpe Ratio is 0.93, which is comparable to the IYG Sharpe Ratio of 0.91. The chart below compares the historical Sharpe Ratios of VFH and IYG, 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

VFH vs. IYG - Drawdown Comparison

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

Drawdown Indicators

	VFH	IYG	Difference
Max Drawdown Largest peak-to-trough decline	-78.61%	-81.84%	+3.23%
Max Drawdown (1Y) Largest decline over 1 year	-14.75%	-15.90%	+1.15%
Max Drawdown (3Y) Largest decline over 3 years	-17.30%	-18.54%	+1.24%
Max Drawdown (5Y) Largest decline over 5 years	-25.66%	-29.62%	+3.96%
Max Drawdown (10Y) Largest decline over 10 years	-44.42%	-44.32%	-0.10%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-18.42%	-20.63%	+2.21%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.67%	6.25%	-0.58%

Volatility

VFH vs. IYG - Volatility Comparison

The current volatility for Vanguard Financials ETF (VFH) is 3.94%, while iShares U.S. Financial Services ETF (IYG) has a volatility of 4.49%. This indicates that VFH experiences smaller price fluctuations and is considered to be less risky than IYG based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFH	IYG	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.94%	4.49%	-0.55%
Volatility (6M) Calculated over the trailing 6-month period	11.22%	12.00%	-0.78%
Volatility (1Y) Calculated over the trailing 1-year period	14.96%	15.75%	-0.79%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.13%	20.34%	-1.21%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.48%	23.38%	-0.90%

VFH vs. IYG - Expense Ratio Comparison

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

Dividends

VFH vs. IYG - Dividend Comparison

VFH's dividend yield for the trailing twelve months is around 1.64%, more than IYG's 1.01% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IYG iShares U.S. Financial Services ETF	1.01%	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	1.64%	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 IYG in my portfolio?

With a correlation of 0.98, VFH and IYG 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, VFH or IYG?

IYG has higher volatility (4.49%) compared to VFH (3.94%). In terms of maximum drawdown, VFH dropped -78.61% vs IYG's -81.84%.

Which ETF is better, VFH or IYG?

On 10-year performance, IYG leads with 14.64% vs 13.37% for VFH. On fees, VFH is cheaper at 0.09% per year. On volatility, VFH has been the lower-risk option at 3.94%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VFH or IYG?

Over the 10-year period, IYG has performed better with a 14.64% return vs 13.37%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VFH or IYG?

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

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

VFH has the higher dividend yield at 1.64%, compared with 1.01% for IYG.

What is the main difference between VFH and IYG?

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

Which has better risk-adjusted returns?

VFH currently has the higher Sharpe Ratio (0.93 vs 0.91), 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.