The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between DIA and VTIP? And which fund is better?
The expense ratio of DIA is 0.11 percentage points higher than VTIP’s (0.16% vs. 0.05%). DIA also has a high exposure to the financial services sector while VTIP is mostly comprised of AAA bonds. Overall, DIA has provided higher returns than VTIP over the past ten years.
In this article, we’ll compare DIA vs. VTIP. We’ll look at fund composition and risk metrics, as well as at their holdings and annual returns. Moreover, I’ll also discuss DIA’s and VTIP’s portfolio growth, industry exposure, and performance and examine how these affect their overall returns.
Summary
| DIA | VTIP | |
| Name | SPDR Dow Jones Industrial Average ETF Trust | Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares |
| Category | Large Value | Inflation-Protected Bond |
| Issuer | SPDR State Street Global Advisors | Vanguard |
| AUM | 30.46B | 50.67B |
| Avg. Return | 13.35% | 1.79% |
| Div. Yield | 1.61% | 1.35% |
| Expense Ratio | 0.16% | 0.05% |
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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.
DIA’s dividend yield is 0.26% higher than that of VTIP (1.61% vs. 1.35%). Also, DIA yielded on average 11.56% more per year over the past decade (13.35% vs. 1.79%). The expense ratio of DIA is 0.11 percentage points higher than VTIP’s (0.16% vs. 0.05%).
Fund Composition
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%.
| VTIP Bond Sectors | Weight |
| AAA | 99.87% |
| Others | 0.13% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| DIA | VTIP | |
| Mean Return | 1.13 | 0 |
| R-squared | 93.31 | 0 |
| Std. Deviation | 13.68 | 0 |
| Alpha | -0.94 | 0 |
| Beta | 0.97 | 0 |
| Sharpe Ratio | 0.94 | 0 |
| Treynor Ratio | 13.07 | 0 |
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Treynor Ratio of 13.07 with a Alpha of -0.94 and a Sharpe Ratio of 0.94. Its Standard Deviation is 13.68 while DIA’s Mean Return is 1.13. Furthermore, the fund has a Beta of 0.97 and a R-squared of 93.31.
The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a Alpha of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its R-squared is 0 while VTIP’s Treynor Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a Mean Return of 0.
DIA’s Mean Return is 1.13 points higher than that of VTIP and its R-squared is 93.31 points higher. With a Standard Deviation of 13.68, DIA is slightly more volatile than VTIP. The Alpha and Beta of DIA are 0.94 points lower and 0.97 points higher than VTIP’s Alpha and Beta.
Performance
Annual Returns
| Year | DIA | VTIP |
| 2020 | 9.63% | 4.97% |
| 2019 | 25.09% | 4.83% |
| 2018 | -3.6% | 0.54% |
| 2017 | 27.97% | 0.82% |
| 2016 | 16.28% | 2.71% |
| 2015 | 0.1% | -0.15% |
| 2014 | 9.88% | -1.17% |
| 2013 | 29.41% | -1.55% |
| 2012 | 10.04% | 0.0% |
| 2011 | 8.21% | 0.0% |
| 2010 | 13.87% | 0.0% |
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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| DIA | $10,000 | $21,636 | 13.35% |
| VTIP | $10,000 | $11,305 | 1.79% |
A $10,000 investment in DIA would have resulted in a final balance of $21,636. This is a profit of $11,636 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.35%.
With a $10,000 investment in VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.
DIA’s CAGR is 11.56 percentage points higher than that of VTIP and as a result, would have yielded $10,331 more on a $10,000 investment. Thus, DIA outperformed VTIP by 11.56% annually.
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