The iShares Gold Trust (IAU) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. IAU is a iShares N/A fund and VT is a Vanguard N/A fund. So, what’s the difference between IAU and VT? And which fund is better?
The expense ratio of IAU is 0.17 percentage points higher than VT’s (0.25% vs. 0.08%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than VT over the past 11 years.
In this article, we’ll compare IAU vs. VT. We’ll look at portfolio growth and fund composition, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IAU’s and VT’s annual returns, performance, and industry exposure and examine how these affect their overall returns.
Summary
| IAU | VT | |
| Name | iShares Gold Trust | Vanguard Total World Stock Index Fund ETF Shares |
| Category | N/A | N/A |
| Issuer | iShares | Vanguard |
| AUM | 28.61B | 30.44B |
| Avg. Return | 6.03% | 10.42% |
| Div. Yield | 0.0% | 1.65% |
| Expense Ratio | 0.25% | 0.08% |
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
IAU’s dividend yield is 1.65% lower than that of VT (0.0% vs. 1.65%). Also, IAU yielded on average 4.38% less per year over the past decade (6.03% vs. 10.42%). The expense ratio of IAU is 0.17 percentage points higher than VT’s (0.25% vs. 0.08%).
Fund Composition
Industry Exposure
| IAU | VT | |
| Technology | 0.0% | 19.63% |
| Industrials | 0.0% | 10.7% |
| Energy | 0.0% | 3.48% |
| Communication Services | 0.0% | 9.02% |
| Utilities | 0.0% | 2.6% |
| Healthcare | 0.0% | 11.58% |
| Consumer Defensive | 0.0% | 6.71% |
| Real Estate | 0.0% | 3.64% |
| Financial Services | 0.0% | 15.36% |
| Consumer Cyclical | 0.0% | 12.32% |
| Basic Materials | 0.0% | 4.97% |
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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
IAU is 19.63% less exposed to the Technology sector than VT (0.0% vs 19.63%). IAU’s exposure to Industrials and Energy stocks is 10.70% lower and 3.48% lower respectively (0.0% vs. 10.7% and 0.0% vs. 3.48%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 31.32% less of the fund’s holdings compared to VT (0.00% vs. 31.32%).
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%.
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
Risk Analysis
| IAU | VT | |
| Mean Return | 0.23 | 0.9 |
| R-squared | 16.03 | 99.35 |
| Std. Deviation | 16.97 | 14.19 |
| Alpha | 4.16 | 0.2 |
| Beta | 0.48 | 1.01 |
| Sharpe Ratio | 0.13 | 0.71 |
| Treynor Ratio | 1.5 | 9.5 |
The iShares Gold Trust (IAU) has a Treynor Ratio of 1.5 with a Sharpe Ratio of 0.13 and a Beta of 0.48. Its R-squared is 16.03 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 Total World Stock Index Fund ETF Shares (VT) has a R-squared of 99.35 with a Mean Return of 0.9 and a Sharpe Ratio of 0.71. Its Beta is 1.01 while VT’s Alpha is 0.2. Furthermore, the fund has a Treynor Ratio of 9.5 and a Standard Deviation of 14.19.
IAU’s Mean Return is 0.67 points lower than that of VT and its R-squared is 83.32 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than VT. The Alpha and Beta of IAU are 3.96 points higher and 0.53 points lower than VT’s Alpha and Beta.
Performance
Annual Returns
| Year | IAU | VT |
| 2020 | 23.86% | 16.74% |
| 2019 | 18.54% | 26.8% |
| 2018 | -1.39% | -9.67% |
| 2017 | 11.58% | 24.19% |
| 2016 | 8.85% | 8.77% |
| 2015 | -11.65% | -1.88% |
| 2014 | -0.44% | 3.97% |
| 2013 | -27.96% | 22.98% |
| 2012 | 8.37% | 17.33% |
| 2011 | 8.66% | -7.71% |
| 2010 | 27.93% | 13.05% |
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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IAU | $10,000 | $16,786 | 6.03% |
| VT | $10,000 | $27,739 | 10.42% |
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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
IAU’s CAGR is 4.38 percentage points lower than that of VT and as a result, would have yielded $10,953 less on a $10,000 investment. Thus, IAU performed worse than VT by 4.38% annually.
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