VGK vs. HYG

Last updated Jun 3, 2026

VGK (Vanguard FTSE Europe ETF) and HYG (iShares iBoxx $ High Yield Corporate Bond ETF) are both exchange-traded funds - VGK is a Europe Equities fund tracking the FTSE Developed Europe All Cap Index, while HYG is a High Yield Bonds fund tracking the iBoxx $ Liquid High Yield Index. Both are passively managed. Over the past 10 years, VGK returned 9.39%/yr vs 4.97%/yr for HYG. A 0.62 correlation means they provide meaningful diversification when combined. VGK charges 0.06%/yr vs 0.49%/yr for HYG.

Performance

VGK vs. HYG - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Europe ETF (VGK) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VGK achieves a 6.90% return, which is significantly higher than HYG's 1.60% return. Over the past 10 years, VGK has outperformed HYG with an annualized return of 9.39%, while HYG has yielded a comparatively lower 4.97% annualized return.

VGK

• 1D: 0.50%
• 1M: 2.08%
• YTD: 6.90%
• 6M: 10.71%
• 1Y: 18.42%
• 3Y*: 16.79%
• 5Y*: 8.68%
• 10Y*: 9.39%

HYG

• 1D: 0.08%
• 1M: 0.31%
• YTD: 1.60%
• 6M: 2.09%
• 1Y: 7.00%
• 3Y*: 8.58%
• 5Y*: 3.87%
• 10Y*: 4.97%

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

VGK vs. HYG - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VGK Vanguard FTSE Europe ETF	6.90%	35.83%	1.88%	20.19%	-15.98%	16.89%	5.43%	24.85%	-14.89%	26.98%
HYG iShares iBoxx $ High Yield Corporate Bond ETF	1.60%	8.59%	7.97%	11.54%	-10.98%	3.76%	4.47%	14.09%	-2.02%	6.07%

Correlation

The correlation between VGK and HYG is 0.69, 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	0.69
Correlation (3Y) Calculated over the trailing 3-year period	0.66
Correlation (5Y) Calculated over the trailing 5-year period	0.68
Correlation (10Y) Calculated over the trailing 10-year period	0.67
Correlation (All Time) Calculated using the full available price history since Apr 12, 2007	0.62

The correlation between VGK and HYG has been stable across timeframes, ranging from 0.62 to 0.69 - a consistent structural relationship.

VGK vs. HYG - Sectors Allocation Comparison

Sectors	VGK	HYG
Financial Services	23.9%	-
Industrials	19.5%	-
Healthcare	12.1%	-
Consumer Defensive	8.5%	-
Technology	8.3%	-
Consumer Cyclical	6.8%	-
Basic Materials	5.4%	-
Energy	5.3%	-
Utilities	4.8%	99.6%
Communication Services	3.3%	-
Real Estate	1.5%	0.4%

Return for Risk

VGK vs. HYG — Risk / Return Rank

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

VGK

VGK Risk / Return Rank: 34
VGK Sharpe Ratio Rank: 33
VGK Sortino Ratio Rank: 33
VGK Omega Ratio Rank: 32
VGK Calmar Ratio Rank: 33
VGK Martin Ratio Rank: 38

HYG

HYG Risk / Return Rank: 60
HYG Sharpe Ratio Rank: 53
HYG Sortino Ratio Rank: 59
HYG Omega Ratio Rank: 58
HYG Calmar Ratio Rank: 59
HYG Martin Ratio Rank: 70

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.

VGK vs. HYG - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Europe ETF (VGK) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG). 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.

	VGK	HYG	Difference
Sharpe ratio Return per unit of total volatility	1.21	1.85	-0.65
Sortino ratio Return per unit of downside risk	1.76	2.80	-1.04
Omega ratio Gain probability vs. loss probability	1.22	1.36	-0.14
Calmar ratio Return relative to maximum drawdown	1.62	2.99	-1.37
Martin ratio Return relative to average drawdown	6.04	13.22	-7.18
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VGK vs. HYG - Sharpe Ratio Comparison

The current VGK Sharpe Ratio is 1.21, which is lower than the HYG Sharpe Ratio of 1.85. The chart below compares the historical Sharpe Ratios of VGK and HYG, 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

	VGK	HYG	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.21	1.85	-0.65
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.49	0.52	-0.03
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.50	0.60	-0.10
Sharpe Ratio (All Time) Calculated using the full available price history	0.28	0.46	-0.18

Drawdowns

VGK vs. HYG - Drawdown Comparison

The maximum VGK drawdown since its inception was -63.61%, which is greater than HYG's maximum drawdown of -34.25%. Use the drawdown chart below to compare losses from any high point for VGK and HYG.

Drawdown Indicators

	VGK	HYG	Difference
Max Drawdown Largest peak-to-trough decline	-63.61%	-34.25%	-29.36%
Max Drawdown (1Y) Largest decline over 1 year	-12.09%	-2.34%	-9.75%
Max Drawdown (3Y) Largest decline over 3 years	-14.31%	-4.56%	-9.75%
Max Drawdown (5Y) Largest decline over 5 years	-32.74%	-15.79%	-16.95%
Max Drawdown (10Y) Largest decline over 10 years	-37.24%	-22.03%	-15.21%
Current Drawdown Current decline from peak	-1.23%	-0.00%	-1.23%
Average Drawdown Average peak-to-trough decline	-13.35%	-3.24%	-10.11%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.24%	0.53%	+2.71%

Volatility

VGK vs. HYG - Volatility Comparison

Vanguard FTSE Europe ETF (VGK) has a higher volatility of 5.94% compared to iShares iBoxx $ High Yield Corporate Bond ETF (HYG) at 1.22%. This indicates that VGK's price experiences larger fluctuations and is considered to be riskier than HYG based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VGK	HYG	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.94%	1.22%	+4.72%
Volatility (6M) Calculated over the trailing 6-month period	12.73%	3.00%	+9.73%
Volatility (1Y) Calculated over the trailing 1-year period	15.38%	3.79%	+11.59%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.89%	7.52%	+10.37%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.96%	8.29%	+10.67%

VGK vs. HYG - Expense Ratio Comparison

VGK has a 0.06% expense ratio, which is lower than HYG's 0.49% expense ratio.

Dividends

VGK vs. HYG - Dividend Comparison

VGK's dividend yield for the trailing twelve months is around 2.78%, less than HYG's 5.90% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
HYG iShares iBoxx $ High Yield Corporate Bond ETF	5.90%	5.71%	6.01%	5.74%	5.30%	4.02%	4.88%	4.99%	5.54%	5.12%	5.27%	5.90%
VGK Vanguard FTSE Europe ETF	2.78%	2.86%	3.61%	3.15%	3.25%	3.05%	2.11%	3.27%	3.95%	2.70%	3.52%	3.25%

Frequently Asked Questions

Can I hold both VGK and HYG in my portfolio?

VGK and HYG have a correlation of 0.69, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VGK or HYG?

VGK has higher volatility (5.94%) compared to HYG (1.22%). In terms of maximum drawdown, VGK dropped -63.61% vs HYG's -34.25%.

Which ETF is better, VGK or HYG?

On 10-year performance, VGK leads with 9.39% vs 4.97% for HYG. On fees, VGK is cheaper at 0.06% per year. On volatility, HYG has been the lower-risk option at 1.22%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VGK or HYG?

Over the 10-year period, VGK has performed better with a 9.39% return vs 4.97%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VGK or HYG?

VGK is cheaper with a 0.06% expense ratio, compared with 0.49% for HYG.

Which ETF pays a higher dividend yield, VGK or HYG?

HYG has the higher dividend yield at 5.90%, compared with 2.78% for VGK.

What is the main difference between VGK and HYG?

VGK is categorized as Europe Equities, while HYG is High Yield Bonds. VGK tracks FTSE Developed Europe All Cap Index, while HYG tracks iBoxx $ Liquid High Yield Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.06% for VGK and 0.49% for HYG.

Which has better risk-adjusted returns?

HYG currently has the higher Sharpe Ratio (1.85 vs 1.21), 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.