Skip to content

IAU vs. VLUE: What’s The Difference?

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.

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

IAUVLUE
NameiShares Gold TrustiShares MSCI USA Value Factor ETF
CategoryN/ALarge Value
IssueriSharesiShares
AUM28.61B15.95B
Avg. Return6.03%8.91%
Div. Yield0.0%1.89%
Expense Ratio0.25%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%).

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

IAU vs. VLUE - Industry Exposure

IAUVLUE
Technology0.0%26.89%
Industrials0.0%9.14%
Energy0.0%2.42%
Communication Services0.0%10.39%
Utilities0.0%2.68%
Healthcare0.0%14.31%
Consumer Defensive0.0%7.22%
Real Estate0.0%3.19%
Financial Services0.0%10.96%
Consumer Cyclical0.0%10.66%
Basic Materials0.0%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

IAU HoldingsWeight
Gold100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

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

VLUE HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

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%.

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

IAUVLUE
Mean Return0.230
R-squared16.030
Std. Deviation16.970
Alpha4.160
Beta0.480
Sharpe Ratio0.130
Treynor Ratio1.50

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.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

IAU vs. VLUE - Annual Returns

YearIAUVLUE
202023.86%-0.32%
201918.54%27.47%
2018-1.39%-11.18%
201711.58%21.97%
20168.85%15.68%
2015-11.65%-3.54%
2014-0.44%12.29%
2013-27.96%0.0%
20128.37%0.0%
20118.66%0.0%
201027.93%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

IAU vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IAU$10,000$15,4676.03%
VLUE$10,000$17,2478.91%

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.


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)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) 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!

3) 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!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

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

Leave a Reply

Your email address will not be published. Required fields are marked *