The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares Gold Trust (IAU) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and IAU is a iShares N/A fund. So, what’s the difference between ITOT and IAU? And which fund is better?
The expense ratio of ITOT is 0.22 percentage points lower than IAU’s (0.03% vs. 0.25%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than IAU over the past ten years.
In this article, we’ll compare ITOT vs. IAU. We’ll look at portfolio growth and risk metrics, as well as at their fund composition and annual returns. Moreover, I’ll also discuss ITOT’s and IAU’s holdings, performance, and industry exposure and examine how these affect their overall returns.
Summary
| ITOT | IAU | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares Gold Trust |
| Category | Large Blend | N/A |
| Issuer | iShares | iShares |
| AUM | 41.97B | 28.61B |
| Avg. Return | 14.59% | 6.03% |
| Div. Yield | 1.2% | 0.0% |
| Expense Ratio | 0.03% | 0.25% |
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 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%.
ITOT’s dividend yield is 1.20% higher than that of IAU (1.2% vs. 0.0%). Also, ITOT yielded on average 8.56% more per year over the past decade (14.59% vs. 6.03%). The expense ratio of ITOT is 0.22 percentage points lower than IAU’s (0.03% vs. 0.25%).
Fund Composition
Industry Exposure
| ITOT | IAU | |
| Technology | 24.49% | 0.0% |
| Industrials | 9.21% | 0.0% |
| Energy | 2.51% | 0.0% |
| Communication Services | 10.54% | 0.0% |
| Utilities | 2.35% | 0.0% |
| Healthcare | 13.59% | 0.0% |
| Consumer Defensive | 5.79% | 0.0% |
| Real Estate | 3.67% | 0.0% |
| Financial Services | 13.69% | 0.0% |
| Consumer Cyclical | 11.69% | 0.0% |
| Basic Materials | 2.47% | 0.0% |
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 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%.
ITOT is 24.49% more exposed to the Technology sector than IAU (24.49% vs 0.0%). ITOT’s exposure to Financial Services and Healthcare stocks is 13.69% higher and 13.59% higher respectively (13.69% vs. 0.0% and 13.59% vs. 0.0%). In total, Basic Materials, Energy, and Real Estate also make up 8.65% more of the fund’s holdings compared to IAU (8.65% vs. 0.00%).
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| 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%.
| 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%.
Risk Analysis
| ITOT | IAU | |
| Mean Return | 1.27 | 0.23 |
| R-squared | 99.4 | 16.03 |
| Std. Deviation | 14.02 | 16.97 |
| Alpha | -0.54 | 4.16 |
| Beta | 1.03 | 0.48 |
| Sharpe Ratio | 1.04 | 0.13 |
| Treynor Ratio | 14.13 | 1.5 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Beta of 1.03 with a Standard Deviation of 14.02 and a Alpha of -0.54. Its R-squared is 99.4 while ITOT’s Mean Return is 1.27. Furthermore, the fund has a Sharpe Ratio of 1.04 and a Treynor Ratio of 14.13.
The iShares Gold Trust (IAU) has a Beta of 0.48 with a Treynor Ratio of 1.5 and a R-squared of 16.03. Its Mean Return is 0.23 while IAU’s Alpha is 4.16. Furthermore, the fund has a Sharpe Ratio of 0.13 and a Standard Deviation of 16.97.
ITOT’s Mean Return is 1.04 points higher than that of IAU and its R-squared is 83.37 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than IAU. The Alpha and Beta of ITOT are 4.70 points lower and 0.55 points higher than IAU’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | IAU |
| 2020 | 20.75% | 23.86% |
| 2019 | 30.87% | 18.54% |
| 2018 | -5.27% | -1.39% |
| 2017 | 21.23% | 11.58% |
| 2016 | 12.59% | 8.85% |
| 2015 | 0.96% | -11.65% |
| 2014 | 13.01% | -0.44% |
| 2013 | 32.67% | -27.96% |
| 2012 | 15.98% | 8.37% |
| 2011 | 1.55% | 8.66% |
| 2010 | 16.15% | 27.93% |
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 2010 was the strongest year for IAU, returning 27.93% on an annual basis. The poorest year for IAU in the last ten years was 2013, with a yield of -27.96%. Most years the iShares Gold Trust has given investors modest returns, such as in 2012, 2011, and 2016, when gains were 8.37%, 8.66%, and 8.85% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| IAU | $10,000 | $16,786 | 6.03% |
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 IAU, the end total would have been $16,786. This equates to a $6,786 profit over 11 years and a compound annual growth rate (CAGR) of 6.03%.
ITOT’s CAGR is 8.56 percentage points higher than that of IAU and as a result, would have yielded $25,524 more on a $10,000 investment. Thus, ITOT outperformed IAU by 8.56% annually.
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