DIA vs. VBR: What’s The Difference?

The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and VBR is a Vanguard Small Value fund. So, what’s the difference between DIA and VBR? And which fund is better?

The expense ratio of DIA is 0.09 percentage points higher than VBR’s (0.16% vs. 0.07%). DIA also has a higher exposure to the financial services sector and a lower standard deviation. Overall, DIA has provided higher returns than VBR over the past 11 years.

In this article, we’ll compare DIA vs. VBR. We’ll look at holdings and risk metrics, as well as at their portfolio growth and performance. Moreover, I’ll also discuss DIA’s and VBR’s fund composition, industry exposure, and annual returns and examine how these affect their overall returns.

Summary

DIA VBR
Name SPDR Dow Jones Industrial Average ETF Trust Vanguard Small-Cap Value Index Fund ETF Shares
Category Large Value Small Value
Issuer SPDR State Street Global Advisors Vanguard
AUM 30.46B 48.08B
Avg. Return 13.35% 12.28%
Div. Yield 1.61% 1.6%
Expense Ratio 0.16% 0.07%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.

DIA’s dividend yield is 0.01% higher than that of VBR (1.61% vs. 1.6%). Also, DIA yielded on average 1.07% more per year over the past decade (13.35% vs. 12.28%). The expense ratio of DIA is 0.09 percentage points higher than VBR’s (0.16% vs. 0.07%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

DIA vs. VBR - Industry Exposure

DIA VBR
Technology 17.32% 8.39%
Industrials 16.7% 18.44%
Energy 2.0% 5.15%
Communication Services 4.42% 1.77%
Utilities 0.0% 3.65%
Healthcare 17.92% 7.16%
Consumer Defensive 6.3% 4.36%
Real Estate 0.0% 10.92%
Financial Services 20.68% 20.04%
Consumer Cyclical 13.44% 13.82%
Basic Materials 1.21% 6.31%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.

VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.

DIA is 0.64% more exposed to the Financial Services sector than VBR (20.68% vs 20.04%). DIA’s exposure to Healthcare and Technology stocks is 10.76% higher and 8.93% higher respectively (17.92% vs. 7.16% and 17.32% vs. 8.39%). In total, Utilities, Basic Materials, and Energy also make up 11.90% less of the fund’s holdings compared to VBR (3.21% vs. 15.11%).

Holdings

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

VBR - Holdings

VBR Holdings Weight
Diamondback Energy Inc 0.55%
VICI Properties Inc Ordinary Shares 0.54%
IDEX Corp 0.54%
Nuance Communications Inc 0.5%
Molina Healthcare Inc 0.48%
Signature Bank 0.46%
Novavax Inc 0.44%
Howmet Aerospace Inc 0.44%
Apollo Global Management Inc Class A 0.42%
Brown & Brown Inc 0.41%

VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.

Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

DIA VBR
Mean Return 1.13 1.08
R-squared 93.31 82.2
Std. Deviation 13.68 18.37
Alpha -0.94 -5.09
Beta 0.97 1.23
Sharpe Ratio 0.94 0.67
Treynor Ratio 13.07 9.15

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Sharpe Ratio of 0.94 with a Alpha of -0.94 and a Mean Return of 1.13. Its Beta is 0.97 while DIA’s Standard Deviation is 13.68. Furthermore, the fund has a R-squared of 93.31 and a Treynor Ratio of 13.07.

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Treynor Ratio of 9.15 with a Beta of 1.23 and a Alpha of -5.09. Its Sharpe Ratio is 0.67 while VBR’s Mean Return is 1.08. Furthermore, the fund has a R-squared of 82.2 and a Standard Deviation of 18.37.

DIA’s Mean Return is 0.05 points higher than that of VBR and its R-squared is 11.11 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than VBR. The Alpha and Beta of DIA are 4.15 points higher and 0.26 points lower than VBR’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).

Performance

Annual Returns

DIA vs. VBR - Annual Returns

Year DIA VBR
2020 9.63% 5.82%
2019 25.09% 22.76%
2018 -3.6% -12.22%
2017 27.97% 11.79%
2016 16.28% 24.8%
2015 0.1% -4.67%
2014 9.88% 10.55%
2013 29.41% 36.57%
2012 10.04% 18.78%
2011 8.21% -4.05%
2010 13.87% 24.97%

DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% respectively.

The year 2013 was the strongest year for VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.

Portfolio Growth

DIA vs. VBR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $37,965 13.35%
VBR $10,000 $32,611 12.28%

A $10,000 investment in DIA would have resulted in a final balance of $37,965. This is a profit of $27,965 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

With a $10,000 investment in VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.

DIA’s CAGR is 1.07 percentage points higher than that of VBR and as a result, would have yielded $5,354 more on a $10,000 investment. Thus, DIA outperformed VBR by 1.07% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply