The iShares Gold Trust (IAU) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. IAU is a iShares N/A fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between IAU and VXF? And which fund is better?
The expense ratio of IAU is 0.19 percentage points higher than VXF’s (0.25% vs. 0.06%). IAU also has a lower exposure to the technology sector and a lower standard deviation. Overall, IAU has provided lower returns than VXF over the past 11 years.
In this article, we’ll compare IAU vs. VXF. We’ll look at fund composition and annual returns, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss IAU’s and VXF’s holdings, performance, and industry exposure and examine how these affect their overall returns.
|Name||iShares Gold Trust||Vanguard Extended Market 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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
IAU’s dividend yield is 1.19% lower than that of VXF (0.0% vs. 1.19%). Also, IAU yielded on average 9.44% less per year over the past decade (6.03% vs. 15.47%). The expense ratio of IAU is 0.19 percentage points higher than VXF’s (0.25% vs. 0.06%).
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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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
IAU is 23.61% less exposed to the Technology sector than VXF (0.0% vs 23.61%). IAU’s exposure to Industrials and Energy stocks is 11.31% lower and 2.46% lower respectively (0.0% vs. 11.31% and 0.0% vs. 2.46%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 32.07% less of the fund’s holdings compared to VXF (0.00% vs. 32.07%).
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%.
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|CrowdStrike Holdings Inc Class A||0.63%|
|Marvell Technology Inc||0.6%|
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
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The iShares Gold Trust (IAU) has a R-squared of 16.03 with a Alpha of 4.16 and a Standard Deviation of 16.97. Its Sharpe Ratio is 0.13 while IAU’s Beta is 0.48. Furthermore, the fund has a Treynor Ratio of 1.5 and a Mean Return of 0.23.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Sharpe Ratio of 0.79 with a R-squared of 85.73 and a Mean Return of 1.24. Its Beta is 1.23 while VXF’s Alpha is -3.26. Furthermore, the fund has a Treynor Ratio of 10.92 and a Standard Deviation of 18.04.
IAU’s Mean Return is 1.01 points lower than that of VXF and its R-squared is 69.70 points lower. With a Standard Deviation of 16.97, IAU is slightly less volatile than VXF. The Alpha and Beta of IAU are 7.42 points higher and 0.75 points lower than VXF’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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% 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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
IAU’s CAGR is 9.44 percentage points lower than that of VXF and as a result, would have yielded $27,344 less on a $10,000 investment. Thus, IAU performed worse than VXF by 9.44% annually.
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