The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between ITOT and EFV? And which fund is better?
The expense ratio of ITOT is 0.36 percentage points lower than EFV’s (0.03% vs. 0.39%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than EFV over the past ten years.
In this article, we’ll compare ITOT vs. EFV. We’ll look at portfolio growth and industry exposure, as well as at their annual returns and fund composition. Moreover, I’ll also discuss ITOT’s and EFV’s performance, risk metrics, and holdings and examine how these affect their overall returns.
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|Name||iShares Core S&P Total U.S. Stock Market ETF||iShares MSCI EAFE Value ETF|
|Category||Large Blend||Foreign Large Value|
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
ITOT’s dividend yield is 1.74% lower than that of EFV (1.2% vs. 2.94%). Also, ITOT yielded on average 10.60% more per year over the past decade (14.59% vs. 3.99%). The expense ratio of ITOT is 0.36 percentage points lower than EFV’s (0.03% vs. 0.39%).
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The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.
ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.
The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
ITOT is 21.51% more exposed to the Technology sector than EFV (24.49% vs 2.98%). ITOT’s exposure to Financial Services and Healthcare stocks is 12.86% lower and 4.40% higher respectively (13.69% vs. 26.55% and 13.59% vs. 9.19%). In total, Basic Materials, Energy, and Real Estate also make up 12.60% less of the fund’s holdings compared to EFV (8.65% vs. 21.25%).
|Facebook Inc Class A||1.89%|
|Alphabet Inc Class A||1.79%|
|Alphabet Inc Class C||1.71%|
|Berkshire Hathaway Inc Class B||1.17%|
|JPMorgan Chase & Co||1.02%|
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
|Toyota Motor Corp||2.21%|
|Commonwealth Bank of Australia||1.59%|
|HSBC Holdings PLC||1.4%|
|Rio Tinto PLC||1.1%|
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Sharpe Ratio of 1.04 with a Treynor Ratio of 14.13 and a Alpha of -0.54. Its Beta is 1.03 while ITOT’s R-squared is 99.4. Furthermore, the fund has a Mean Return of 1.27 and a Standard Deviation of 14.02.
The iShares MSCI EAFE Value ETF (EFV) has a R-squared of 92.15 with a Treynor Ratio of 2.92 and a Standard Deviation of 16.53. Its Beta is 1.05 while EFV’s Alpha is -1.77. Furthermore, the fund has a Sharpe Ratio of 0.26 and a Mean Return of 0.42.
ITOT’s Mean Return is 0.85 points higher than that of EFV and its R-squared is 7.25 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than EFV. The Alpha and Beta of ITOT are 1.23 points higher and 0.02 points lower than EFV’s Alpha and Beta.
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ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% respectively.
The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in ITOT would have resulted in a final balance of $42,310. This is a profit of $32,310 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.59%.
With a $10,000 investment in EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.
ITOT’s CAGR is 10.60 percentage points higher than that of EFV and as a result, would have yielded $28,176 more on a $10,000 investment. Thus, ITOT outperformed EFV by 10.60% annually.
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