The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and IVE is a iShares Large Value fund. So, what’s the difference between ITOT and IVE? And which fund is better?
The expense ratio of ITOT is 0.15 percentage points lower than IVE’s (0.03% vs. 0.18%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than IVE over the past ten years.
In this article, we’ll compare ITOT vs. IVE. We’ll look at fund composition and risk metrics, as well as at their holdings and annual returns. Moreover, I’ll also discuss ITOT’s and IVE’s industry exposure, portfolio growth, and performance and examine how these affect their overall returns.
|Name||iShares Core S&P Total U.S. Stock Market ETF||iShares S&P 500 Value ETF|
|Category||Large Blend||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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
ITOT’s dividend yield is 0.68% lower than that of IVE (1.2% vs. 1.88%). Also, ITOT yielded on average 2.91% more per year over the past decade (14.59% vs. 11.68%). The expense ratio of ITOT is 0.15 percentage points lower than IVE’s (0.03% vs. 0.18%).
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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 S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
ITOT is 15.08% more exposed to the Technology sector than IVE (24.49% vs 9.41%). ITOT’s exposure to Financial Services and Healthcare stocks is 8.37% lower and 1.81% lower respectively (13.69% vs. 22.06% and 13.59% vs. 15.4%). In total, Basic Materials, Energy, and Real Estate also make up 4.15% less of the fund’s holdings compared to IVE (8.65% vs. 12.80%).
|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%.
|Berkshire Hathaway Inc Class B||3.05%|
|JPMorgan Chase & Co||2.65%|
|The Walt Disney Co||1.85%|
|Bank of America Corp||1.67%|
|Johnson & Johnson||1.57%|
|Exxon Mobil Corp||1.41%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
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The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a R-squared of 99.4 with a Alpha of -0.54 and a Mean Return of 1.27. Its Treynor Ratio is 14.13 while ITOT’s Sharpe Ratio is 1.04. Furthermore, the fund has a Standard Deviation of 14.02 and a Beta of 1.03.
The iShares S&P 500 Value ETF (IVE) has a Beta of 1.01 with a Alpha of -2.9 and a R-squared of 92.08. Its Standard Deviation is 14.3 while IVE’s Mean Return is 1.05. Furthermore, the fund has a Sharpe Ratio of 0.83 and a Treynor Ratio of 11.41.
ITOT’s Mean Return is 0.22 points higher than that of IVE and its R-squared is 7.32 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than IVE. The Alpha and Beta of ITOT are 2.36 points higher and 0.02 points higher than IVE’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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% 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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.
ITOT’s CAGR is 2.91 percentage points higher than that of IVE and as a result, would have yielded $10,960 more on a $10,000 investment. Thus, ITOT outperformed IVE by 2.91% annually.
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