The iShares Gold Trust (IAU) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. IAU is a iShares N/A fund and VHT is a Vanguard Health fund. So, what’s the difference between IAU and VHT? And which fund is better?
The expense ratio of IAU is 0.15 percentage points higher than VHT’s (0.25% vs. 0.1%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than VHT over the past 11 years.
In this article, we’ll compare IAU vs. VHT. We’ll look at risk metrics and holdings, as well as at their industry exposure and performance. Moreover, I’ll also discuss IAU’s and VHT’s annual returns, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Gold Trust||Vanguard Health Care Index Fund ETF Shares|
The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.
The Vanguard Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
IAU’s dividend yield is 1.15% lower than that of VHT (0.0% vs. 1.15%). Also, IAU yielded on average 10.01% less per year over the past decade (6.03% vs. 16.04%). The expense ratio of IAU is 0.15 percentage points higher than VHT’s (0.25% vs. 0.1%).
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The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
The Vanguard Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
IAU is 0.05% less exposed to the Technology sector than VHT (0.0% vs 0.05%). IAU’s exposure to Industrials and Energy stocks is 0.05% lower and 0.00% lower respectively (0.0% vs. 0.05% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.02% less of the fund’s holdings compared to VHT (0.00% vs. 0.02%).
IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.
N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.
|Johnson & Johnson||7.34%|
|UnitedHealth Group Inc||6.44%|
|Thermo Fisher Scientific Inc||3.37%|
|Merck & Co Inc||3.33%|
|Eli Lilly and Co||3.17%|
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
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The iShares Gold Trust (IAU) has a Beta of 0.48 with a R-squared of 16.03 and a Sharpe Ratio of 0.13. Its Treynor Ratio is 1.5 while IAU’s Standard Deviation is 16.97. Furthermore, the fund has a Alpha of 4.16 and a Mean Return of 0.23.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a Alpha of 7.99 with a Standard Deviation of 13.58 and a Beta of 0.75. Its Mean Return is 1.33 while VHT’s Sharpe Ratio is 1.13. Furthermore, the fund has a R-squared of 59.86 and a Treynor Ratio of 20.74.
IAU’s Mean Return is 1.10 points lower than that of VHT and its R-squared is 43.83 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than VHT. The Alpha and Beta of IAU are 3.83 points lower and 0.27 points lower than VHT’s Alpha and Beta.
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IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% respectively.
The year 2013 was the strongest year for VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IAU would have resulted in a final balance of $16,786. This is a profit of $6,786 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.03%.
With a $10,000 investment in VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
IAU’s CAGR is 10.01 percentage points lower than that of VHT and as a result, would have yielded $31,678 less on a $10,000 investment. Thus, IAU performed worse than VHT by 10.01% annually.
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