TIPS vs VTIP: Head-to-Head Comparison
TIPS vs VTIP: iShares TIPS Bond ETF has an expense ratio of 0.19% while Vanguard Short-Term Inflation-Protected Securities ETF charges 0.04%. TIPS holds 50 securities vs VTIP's 20. 5-year returns: 2.50% vs 2.80%.
Last updated: April 2026
Bond
Quick Verdict
TIPS edges out VTIP with a stronger Beginner Suitability Score (9 vs 8.5). It offers better overall characteristics for new investors.
Side-by-Side Comparison
| Metric | TIPS | VTIP |
|---|---|---|
| Expense Ratio | 0.19% | 0.04% |
| AUM | $20.0B | $15.0B |
| Dividend Yield | 2.80% | 3.80% |
| Holdings | 50 | 20 |
| 1-Year Return | 4.00% | 4.20% |
| 5-Year Return (Ann.) | 2.50% | 2.80% |
| 10-Year Return (Ann.) | 2.20% | 2.00% |
| Beta | 0.12 | 0.05 |
| P/E Ratio | N/A | N/A |
TIPS 5-year annualized return is 2.50% compared to VTIP's 2.80%. Over 10 years, TIPS returned 2.20% vs VTIP's 2.00%.
View data table
| Period | TIPS Return | VTIP Return |
|---|---|---|
| YTD | 1.00% | 1.20% |
| 1 Year | 4.00% | 4.20% |
| 3 Year | 1.50% | 2.50% |
| 5 Year | 2.50% | 2.80% |
| 10 Year | 2.20% | 2.00% |
Key Differences Between TIPS and VTIP
TIPS (iShares TIPS Bond ETF) is a inflation-protected bond fund managed by BlackRock. TIPS invests in U.S. Treasury Inflation-Protected Securities, which are government bonds whose principal value adjusts with inflation. This means your investment is designed to keep pace with rising prices over time. For beginners worried about inflation eroding their savings, TIPS offers a straightforward way to add inflation protection to a fixed-income portfolio.
VTIP (Vanguard Short-Term Inflation-Protected Securities ETF) is a short-term tips fund managed by Vanguard. VTIP focuses on short-term U.S. Treasury Inflation-Protected Securities with maturities under five years, combining inflation protection with low interest rate sensitivity. Unlike the broader TIPS ETF, VTIP's shorter duration means less price volatility while still guarding against rising consumer prices. It is an excellent option for beginners who want inflation protection without the ups and downs of longer-dated bonds.
The most notable differences are in fees (0.19% vs 0.04%), number of holdings (50 vs 20), and 5-year returns (2.50% vs 2.80%).
TIPS vs VTIP multi-factor comparison: TIPS has a 0.19% expense ratio, 2.50% 5-year return, 50 holdings, 0.12 beta, and 2.80% yield. VTIP has 0.04% expense ratio, 2.80% 5-year return, 20 holdings, 0.05 beta, and 3.80% yield.
View data table
| Metric | TIPS | VTIP |
|---|---|---|
| Expense Ratio | 0.19% | 0.04% |
| 5-Year Return | 2.50% | 2.80% |
| Holdings | 50 | 20 |
| Beta | 0.12 | 0.05 |
| Dividend Yield | 2.80% | 3.80% |
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Holdings Overlap Analysis
100%
Holdings Overlap
TIPS and VTIP share 100% of their top holdings. This means they are very similar funds — owning both would result in significant duplication in your portfolio. For most beginners, choosing one is sufficient.
TIPS and VTIP share 100% of their top holdings (high overlap). TIPS has 50 total holdings and VTIP has 20. Common holdings include TIPS, TIPS, TIPS.
View data table
| Metric | TIPS | VTIP |
|---|---|---|
| Overlap | 100% | 100% |
| Unique Holdings | 0% | 0% |
| Total Holdings | 50 | 20 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
TIPS
Fee cost: $1,613
VTIP
Fee cost: $344
Over 20 years, the fee difference amounts to $1,269 on a $10,000 investment. VTIP saves you more in fees over time.
On a $10,000 investment over 20 years at 8% return, TIPS (0.19% fee) grows to $44,997 while VTIP (0.04% fee) grows to $46,266. The fee difference costs $1,269.
View data table
| Year | TIPS Value | VTIP Value |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 5 | $14,564 | $14,666 |
| 10 | $21,212 | $21,509 |
| 15 | $30,895 | $31,546 |
| 20 | $44,997 | $46,266 |
Which One Should a Beginner Choose?
Choose TIPS if: You want investors concerned about inflation eroding the value of their bond holdings, retirees seeking to maintain purchasing power on fixed-income investments, those looking for a government-backed inflation hedge in their portfolio. It's managed by BlackRock with an expense ratio of 0.19%.
Choose VTIP if: You want cash-conscious investors who want inflation protection without volatility, short-term savers looking for an alternative to money market funds, conservative portfolio builders adding a low-risk inflation hedge. It's managed by Vanguard with an expense ratio of 0.04%.
Can You Own Both TIPS and VTIP?
With 100% holdings overlap, owning both means you're essentially doubling down on the same stocks. For beginners, we recommend picking one to keep things simple. If you want more diversification, consider pairing your choice with an international ETF like VXUS or a bond ETF like BND instead.
Frequently Asked Questions
Should I buy TIPS or VTIP?▾
TIPS edges out VTIP with a stronger Beginner Suitability Score (9 vs 8.5). It offers better overall characteristics for new investors. However, both are solid options. TIPS is best for investors who want investors concerned about inflation eroding the value of their bond holdings, while VTIP is better suited for cash-conscious investors who want inflation protection without volatility.
What is the difference between TIPS and VTIP?▾
TIPS (iShares TIPS Bond ETF) tracks inflation-protected bond investments with 50 holdings and a 0.19% expense ratio. VTIP (Vanguard Short-Term Inflation-Protected Securities ETF) focuses on short-term tips with 20 holdings at 0.04%. Their top holdings overlap by 100%.
Can I own both TIPS and VTIP?▾
Since TIPS and VTIP have 100% holdings overlap, owning both means significant duplication. Most beginners are better off choosing one.