IBB vs VYM: Correlation & Overlap
How closely do iShares Biotechnology ETF (IBB) and Vanguard High Dividend Yield ETF (VYM) trade together? Their weekly returns over three years give a correlation of 0.57, which is moderate. By holdings, the two funds overlap 1.4% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IBB and VYM?
On 3 years of weekly data the IBB/VYM correlation comes out at 0.57, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.28 versus 0.57 over 3 years. The 5-year figure is 0.57, and annualized covariance runs at 144.7 %².
Within IBB's tracked universe of 168 assets, VYM comes in at #54 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months IBB outperformed by 34.3 percentage points (+55.4% for IBB against +21.1% for VYM). The rolling one-year correlation moved between 0.35 and 0.78 over the past three years, a moderate range. Note the risk asymmetry: IBB runs 1.7 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
IBB vs VYM: side by side
| IBB (iShares Biotechnology ETF) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +55.4% | +21.1% |
| 5-year return | +26.6% | +76.6% |
| Volatility (ann.) | 20.7% | 12.3% |
| Beta vs S&P 500 | 0.81 | 0.69 |
| Max drawdown (3Y) | -24.9% | -14.5% |
| Dividend yield | 0.22% | 2.24% |
| Expense ratio | 0.44% | 0.04% |
| Assets under management | $9.2B | $99.2B |
| Sector / category | ETF · Thematic | ETF · Dividend |
IBB, iShares's Health fund, carries $9.2B under management, 235 holdings, a 0.44% expense ratio, a 0.22% trailing dividend yield. VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield.
Portfolio overlap between IBB and VYM
The two portfolios are largely distinct: 1.4% of the funds' weight sits in the same underlying holdings (2 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by IBB: VRTX (7.89%), REGN (5.68%), MRNA (3.76%), ARGX (3.76%), NTRA (3.19%). Only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 2 common positions shown.
Year-by-year returns
| Year | IBB | VYM |
|---|---|---|
| 2022 | -13.7% | -0.4% |
| 2023 | +3.8% | +6.6% |
| 2024 | -2.4% | +17.6% |
| 2025 | +28.0% | +15.4% |
| 2026 | +27.4% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IBB and VYM good diversifiers for each other?
Somewhat, no more. With 0.57 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between IBB and VYM?
As of 2026-08-27, the correlation of weekly returns between IBB and VYM is 0.57 over 3 years, 0.28 over 1 year and 0.57 over 5 years.
Is VYM a good diversifier for IBB?
Somewhat, no more. With 0.57 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do IBB and VYM overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.4% by weight over 2 common positions.
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