TIP vs VTIP: fees, holdings and returns
TIP holds US Treasury Inflation-Protected Securities of all maturities. VTIP holds only TIPS that mature in under five years. VTIP swings much less when interest rates change, and charges a lower fee. Over the same dates since October 2012, TIP returned about 1.5% a year and VTIP returned about 2.2% a year.
Written by the Tactfolio research team. Fund facts checked October 17, 2026. Prices through October 20, 2026.
Key points
- VTIP costs less: 0.03% a year against 0.18%.
- TIP started trading in December 2003. VTIP started in October 2012.
- Worst drops since 2012: TIP −14.5%, VTIP −6.3%.
- Daily correlation: 0.78 (1 means they always move together).
What is the difference between TIP and VTIP?#
Both protect against inflation the same way. The difference is how long the bonds run. Longer TIPS in TIP lose more value when real interest rates rise, as in 2022. VTIP’s short TIPS track current inflation more closely and move less with rates, so its price has been much steadier.
| Fact | TIP | VTIP |
|---|---|---|
| Full name | iShares TIPS Bond ETF | Vanguard Short-Term Inflation-Protected Securities ETF |
| Issuer | iShares (BlackRock) | Vanguard |
| Expense ratio | 0.18% a year | 0.03% a year |
| Started trading | December 4, 2003 | October 12, 2012 |
| Tracks | ICE U.S. Treasury Inflation Linked Bond Index | Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Year Index |
| Holdings | 48 holdings as of October 15, 2026 | 25 holdings as of September 30, 2026 |
| Type | US bonds, ETF | US bonds, ETF |
Fund facts checked on the iShares (BlackRock) TIP page and the Vanguard VTIP page.
Is TIP or VTIP cheaper?#
VTIP costs less: 0.03% a year against 0.18%. On $10,000, that is about $18 a year for TIP and $3 for VTIP. The fund takes its fee out of its own value a little each day, so you never get a bill.
TIP vs VTIP performance over the same dates#
Both funds are measured from October 2012 to October 2026, the dates both traded. TIP returned about 1.5% a year and VTIP returned about 2.2% a year. VTIP came out ahead over this period, which does not mean it will again.
| Measure | TIP | VTIP |
|---|---|---|
| $10,000 grew to | $12,367 | $13,522 |
| Total return | 23.7% | 35.2% |
| Return per year (CAGR) | 1.5% | 2.2% |
| Worst drop from a high | −14.5% | −6.3% |
| Volatility (how much it swings) | 5.6% | 2.5% |
| Last 12 months | −1.5% | 1.8% |
| Last 3 years, per year | 4.3% | 4.9% |
| Last 5 years, per year | −0.1% | 2.9% |
| Last 10 years, per year | 2.1% | 3.0% |
Prices through October 20, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.
TIP and VTIP returns by year#
| Year | TIP | VTIP |
|---|---|---|
| 2026 (part of the year) | −0.8% | 1.7% |
| 2025 | 6.8% | 6.1% |
| 2024 | 1.7% | 4.7% |
| 2023 | 3.8% | 4.6% |
| 2022 | −12.3% | −2.9% |
| 2021 | 5.7% | 5.4% |
| 2020 | 10.8% | 5.0% |
| 2019 | 8.3% | 4.9% |
| 2018 | −1.4% | 0.6% |
| 2017 | 2.9% | 0.8% |
| 2016 | 4.7% | 2.5% |
| 2015 | −1.8% | 0.2% |
| 2014 | 3.6% | −1.4% |
| 2013 | −8.5% | −1.5% |
| 2012 (part of the year) | 0.4% | 0.6% |
Which fell further in bad times?#
A drawdown is how far a fund falls from its last high point. TIP’s worst fall was −14.5%, from November 9, 2021 to October 6, 2023. It got back to that high on February 27, 2026.
VTIP’s worst fall was −6.3%, from March 5, 2020 to March 18, 2020. It got back to that high on June 5, 2020.
Their daily moves had a correlation of 0.78. A correlation of 1 means two funds always move up and down together. Near 0 means they move on their own. So they often move together, but not always.
Why people choose TIP or VTIP#
TIP. People who want the whole TIPS market, including long bonds, tend to pick TIP.
VTIP. People who want inflation protection with small price swings tend to pick VTIP.
Strategies that hold TIP or VTIP#
These classic strategies hold one or both at least some of the time. Each is a set of written rules you can open, test and copy.
- Hybrid Asset Allocation (HAA), by Wouter Keller and JW Keuning, 2023 (holds TIP)
- HAA Simple: Hybrid Asset Allocation with one asset, by Wouter Keller and JW Keuning, 2023 (holds TIP)
- Bold Asset Allocation (BAA), by Wouter Keller, 2022 (holds TIP)
- Bold Asset Allocation G4 (BAA aggressive), by Wouter Keller, 2022 (holds TIP)
- Trinity Portfolio (Meb Faber), by Mebane Faber, 2016 (holds TIP)
- HAA 60/40 (NLX Finance’s Hybrid Asset Allocation variant), by Nicolas Lequeux (NLX Finance), 2024 (holds TIP)
- Paul Novell’s Tactical Bond Strategy, by Paul Novell, 2014 (holds TIP)
Other funds like TIP and VTIP#
Each fund has more funds that hold the same kind of investments, ranked by how closely they move with it: TIP alternatives and VTIP alternatives.
Test a mix of TIP and VTIP#
Open the builder, add TIP and VTIP, and give each a weight, such as 50% and 50%. The backtest shows how the mix would have done, with its worst drop, on daily prices. You can also add a rule, for example to switch between them, and compare. Read the full pages for TIP and VTIP, or see more ETF comparisons.
The details#
Both funds use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. They are compared only on days both traded, starting the later fund’s first day, so neither gets a head start. Correlation uses daily returns over the same days. Read what a backtest simulates for more on these measures.
Common questions#
Why did VTIP fall less than TIP in 2022?#
VTIP holds TIPS that mature within five years, which lose much less value when interest rates rise than the longer TIPS in TIP.
Do VTIP and TIP both adjust for inflation?#
Yes. All TIPS have their value raised with inflation. The funds differ in how long their bonds run.
Which is cheaper, TIP or VTIP?#
VTIP costs less: 0.03% a year against 0.18%. Fees come from each issuer and were checked on October 16, 2026.
Which did better, TIP or VTIP?#
From October 2012 to October 2026, TIP returned about 1.5% a year and VTIP returned about 2.2% a year, with dividends reinvested. Their worst drops were −14.5% and −6.3%. Past returns do not tell you what comes next.