The iShares Gold Trust (IAU) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IAU is a iShares N/A fund and VLUE is a iShares Large Value fund. So, what’s the difference between IAU and VLUE? And which fund is better?
The expense ratio of IAU is 0.10 percentage points higher than VLUE’s (0.25% vs. 0.15%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than VLUE over the past 7 years.
In this article, we’ll compare IAU vs. VLUE. We’ll look at holdings and fund composition, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss IAU’s and VLUE’s performance, portfolio growth, and industry exposure and examine how these affect their overall returns.
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Summary
| IAU | VLUE | |
| Name | iShares Gold Trust | iShares MSCI USA Value Factor ETF |
| Category | N/A | Large Value |
| Issuer | iShares | iShares |
| AUM | 28.61B | 15.95B |
| Avg. Return | 6.03% | 8.91% |
| Div. Yield | 0.0% | 1.89% |
| Expense Ratio | 0.25% | 0.15% |
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 iShares MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
IAU’s dividend yield is 1.89% lower than that of VLUE (0.0% vs. 1.89%). Also, IAU yielded on average 2.88% less per year over the past decade (6.03% vs. 8.91%). The expense ratio of IAU is 0.10 percentage points higher than VLUE’s (0.25% vs. 0.15%).
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Fund Composition
Industry Exposure
| IAU | VLUE | |
| Technology | 0.0% | 26.89% |
| Industrials | 0.0% | 9.14% |
| Energy | 0.0% | 2.42% |
| Communication Services | 0.0% | 10.39% |
| Utilities | 0.0% | 2.68% |
| Healthcare | 0.0% | 14.31% |
| Consumer Defensive | 0.0% | 7.22% |
| Real Estate | 0.0% | 3.19% |
| Financial Services | 0.0% | 10.96% |
| Consumer Cyclical | 0.0% | 10.66% |
| Basic Materials | 0.0% | 2.14% |
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 iShares MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
IAU is 26.89% less exposed to the Technology sector than VLUE (0.0% vs 26.89%). IAU’s exposure to Industrials and Energy stocks is 9.14% lower and 2.42% lower respectively (0.0% vs. 9.14% and 0.0% vs. 2.42%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 24.81% less of the fund’s holdings compared to VLUE (0.00% vs. 24.81%).
Holdings
| IAU Holdings | Weight |
| Gold | 100.0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
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%.
| VLUE Holdings | Weight |
| AT&T Inc | 7.13% |
| Intel Corp | 6.14% |
| General Motors Co | 3.19% |
| Micron Technology Inc | 3.14% |
| Cisco Systems Inc | 3.05% |
| International Business Machines Corp | 2.76% |
| Target Corp | 2.38% |
| Citigroup Inc | 2.32% |
| Ford Motor Co | 2.23% |
| Pfizer Inc | 2.17% |
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
Risk Analysis
| IAU | VLUE | |
| Mean Return | 0.23 | 0 |
| R-squared | 16.03 | 0 |
| Std. Deviation | 16.97 | 0 |
| Alpha | 4.16 | 0 |
| Beta | 0.48 | 0 |
| Sharpe Ratio | 0.13 | 0 |
| Treynor Ratio | 1.5 | 0 |
The iShares Gold Trust (IAU) has a Sharpe Ratio of 0.13 with a Alpha of 4.16 and a Mean Return of 0.23. Its R-squared is 16.03 while IAU’s Treynor Ratio is 1.5. Furthermore, the fund has a Standard Deviation of 16.97 and a Beta of 0.48.
The iShares MSCI USA Value Factor ETF (VLUE) has a Mean Return of 0 with a Alpha of 0 and a Standard Deviation of 0. Its Sharpe Ratio is 0 while VLUE’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Beta of 0.
IAU’s Mean Return is 0.23 points higher than that of VLUE and its R-squared is 16.03 points higher. With a Standard Deviation of 16.97, IAU is slightly more volatile than VLUE. The Alpha and Beta of IAU are 4.16 points higher and 0.48 points higher than VLUE’s Alpha and Beta.
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Performance
Annual Returns
| Year | IAU | VLUE |
| 2020 | 23.86% | -0.32% |
| 2019 | 18.54% | 27.47% |
| 2018 | -1.39% | -11.18% |
| 2017 | 11.58% | 21.97% |
| 2016 | 8.85% | 15.68% |
| 2015 | -11.65% | -3.54% |
| 2014 | -0.44% | 12.29% |
| 2013 | -27.96% | 0.0% |
| 2012 | 8.37% | 0.0% |
| 2011 | 8.66% | 0.0% |
| 2010 | 27.93% | 0.0% |
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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IAU | $10,000 | $15,467 | 6.03% |
| VLUE | $10,000 | $17,247 | 8.91% |
A $10,000 investment in IAU would have resulted in a final balance of $15,467. This is a profit of $5,467 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.03%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
IAU’s CAGR is 2.88 percentage points lower than that of VLUE and as a result, would have yielded $1,780 less on a $10,000 investment. Thus, IAU performed worse than VLUE by 2.88% annually.
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