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IAU vs. VOE: What’s The Difference?

The iShares Gold Trust (IAU) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. IAU is a iShares N/A fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between IAU and VOE? And which fund is better?

The expense ratio of IAU is 0.18 percentage points higher than VOE’s (0.25% vs. 0.07%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than VOE over the past 11 years.

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

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Summary

IAUVOE
NameiShares Gold TrustVanguard Mid-Cap Value Index Fund ETF Shares
CategoryN/AMid-Cap Value
IssueriSharesVanguard
AUM28.61B26.78B
Avg. Return6.03%12.52%
Div. Yield0.0%1.87%
Expense Ratio0.25%0.07%

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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

IAU’s dividend yield is 1.87% lower than that of VOE (0.0% vs. 1.87%). Also, IAU yielded on average 6.49% less per year over the past decade (6.03% vs. 12.52%). The expense ratio of IAU is 0.18 percentage points higher than VOE’s (0.25% vs. 0.07%).

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Fund Composition

Industry Exposure

IAU vs. VOE - Industry Exposure

IAUVOE
Technology0.0%9.85%
Industrials0.0%9.4%
Energy0.0%5.69%
Communication Services0.0%5.27%
Utilities0.0%10.93%
Healthcare0.0%7.04%
Consumer Defensive0.0%4.85%
Real Estate0.0%11.48%
Financial Services0.0%18.26%
Consumer Cyclical0.0%11.8%
Basic Materials0.0%5.44%

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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

IAU is 9.85% less exposed to the Technology sector than VOE (0.0% vs 9.85%). IAU’s exposure to Industrials and Energy stocks is 9.40% lower and 5.69% lower respectively (0.0% vs. 9.4% and 0.0% vs. 5.69%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 41.54% less of the fund’s holdings compared to VOE (0.00% vs. 41.54%).

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%.

VOE - Holdings

VOE HoldingsWeight
Carrier Global Corp Ordinary Shares1.28%
International Flavors & Fragrances Inc1.13%
Motorola Solutions Inc1.12%
Discover Financial Services1.09%
Welltower Inc1.05%
Corteva Inc0.99%
Valero Energy Corp0.97%
Corning Inc0.95%
Willis Towers Watson PLC0.9%
D.R. Horton Inc0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

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Risk Analysis

IAUVOE
Mean Return0.231.05
R-squared16.0388.76
Std. Deviation16.9715.98
Alpha4.16-3.77
Beta0.481.11
Sharpe Ratio0.130.75
Treynor Ratio1.510.19

The iShares Gold Trust (IAU) has a Beta of 0.48 with a Alpha of 4.16 and a Standard Deviation of 16.97. Its Mean Return is 0.23 while IAU’s Treynor Ratio is 1.5. Furthermore, the fund has a Sharpe Ratio of 0.13 and a R-squared of 16.03.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Treynor Ratio of 10.19 with a R-squared of 88.76 and a Alpha of -3.77. Its Beta is 1.11 while VOE’s Standard Deviation is 15.98. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Mean Return of 1.05.

IAU’s Mean Return is 0.82 points lower than that of VOE and its R-squared is 72.73 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than VOE. The Alpha and Beta of IAU are 7.93 points higher and 0.63 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

IAU vs. VOE - Annual Returns

YearIAUVOE
202023.86%2.5%
201918.54%27.98%
2018-1.39%-12.41%
201711.58%17.05%
20168.85%15.26%
2015-11.65%-1.8%
2014-0.44%13.98%
2013-27.96%37.65%
20128.37%16.04%
20118.66%-0.32%
201027.93%21.83%

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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

IAU vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IAU$10,000$16,7866.03%
VOE$10,000$33,65512.52%

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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.

IAU’s CAGR is 6.49 percentage points lower than that of VOE and as a result, would have yielded $16,869 less on a $10,000 investment. Thus, IAU performed worse than VOE by 6.49% annually.


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