The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between ITOT and VBK? And which fund is better?
The expense ratio of ITOT is 0.04 percentage points lower than VBK’s (0.03% vs. 0.07%). ITOT also has a lower exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided lower returns than VBK over the past ten years.
In this article, we’ll compare ITOT vs. VBK. We’ll look at fund composition and risk metrics, as well as at their performance and holdings. Moreover, I’ll also discuss ITOT’s and VBK’s annual returns, industry exposure, and portfolio growth and examine how these affect their overall returns.
Summary
| ITOT | VBK | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Vanguard Small-Cap Growth Index Fund ETF Shares |
| Category | Large Blend | Small Growth |
| Issuer | iShares | Vanguard |
| AUM | 41.97B | 37.89B |
| Avg. Return | 14.59% | 16.53% |
| Div. Yield | 1.2% | 0.45% |
| Expense Ratio | 0.03% | 0.07% |
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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.
ITOT’s dividend yield is 0.75% higher than that of VBK (1.2% vs. 0.45%). Also, ITOT yielded on average 1.94% less per year over the past decade (14.59% vs. 16.53%). The expense ratio of ITOT is 0.04 percentage points lower than VBK’s (0.03% vs. 0.07%).
Fund Composition
Industry Exposure
| ITOT | VBK | |
| Technology | 24.49% | 27.87% |
| Industrials | 9.21% | 13.19% |
| Energy | 2.51% | 1.77% |
| Communication Services | 10.54% | 3.24% |
| Utilities | 2.35% | 0.32% |
| Healthcare | 13.59% | 23.24% |
| Consumer Defensive | 5.79% | 3.83% |
| Real Estate | 3.67% | 7.87% |
| Financial Services | 13.69% | 4.05% |
| Consumer Cyclical | 11.69% | 12.13% |
| Basic Materials | 2.47% | 2.49% |
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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.
VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.
ITOT is 3.38% less exposed to the Technology sector than VBK (24.49% vs 27.87%). ITOT’s exposure to Financial Services and Healthcare stocks is 9.64% higher and 9.65% lower respectively (13.69% vs. 4.05% and 13.59% vs. 23.24%). In total, Basic Materials, Energy, and Real Estate also make up 3.48% less of the fund’s holdings compared to VBK (8.65% vs. 12.13%).
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%.
| VBK Holdings | Weight |
| Charles River Laboratories International Inc | 0.78% |
| Pool Corp | 0.73% |
| Bio-Techne Corp | 0.73% |
| Avantor Inc | 0.73% |
| PerkinElmer Inc | 0.72% |
| Entegris Inc | 0.7% |
| PTC Inc | 0.62% |
| Fair Isaac Corp | 0.57% |
| Bill.com Holdings Inc Ordinary Shares | 0.56% |
| Avalara Inc | 0.55% |
VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.
Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.
Risk Analysis
| ITOT | VBK | |
| Mean Return | 1.27 | 1.22 |
| R-squared | 99.4 | 80.56 |
| Std. Deviation | 14.02 | 17.95 |
| Alpha | -0.54 | -2.81 |
| Beta | 1.03 | 1.18 |
| Sharpe Ratio | 1.04 | 0.78 |
| Treynor Ratio | 14.13 | 11.18 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a R-squared of 99.4 with a Standard Deviation of 14.02 and a Beta of 1.03. Its Treynor Ratio is 14.13 while ITOT’s Alpha is -0.54. Furthermore, the fund has a Mean Return of 1.27 and a Sharpe Ratio of 1.04.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Alpha of -2.81 with a Beta of 1.18 and a R-squared of 80.56. Its Sharpe Ratio is 0.78 while VBK’s Treynor Ratio is 11.18. Furthermore, the fund has a Mean Return of 1.22 and a Standard Deviation of 17.95.
ITOT’s Mean Return is 0.05 points higher than that of VBK and its R-squared is 18.84 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than VBK. The Alpha and Beta of ITOT are 2.27 points higher and 0.15 points lower than VBK’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | VBK |
| 2020 | 20.75% | 35.29% |
| 2019 | 30.87% | 32.75% |
| 2018 | -5.27% | -5.68% |
| 2017 | 21.23% | 21.9% |
| 2016 | 12.59% | 10.74% |
| 2015 | 0.96% | -2.51% |
| 2014 | 13.01% | 4.02% |
| 2013 | 32.67% | 38.18% |
| 2012 | 15.98% | 17.67% |
| 2011 | 1.55% | -1.43% |
| 2010 | 16.15% | 30.87% |
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 VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| VBK | $10,000 | $48,639 | 16.53% |
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 VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.
ITOT’s CAGR is 1.94 percentage points lower than that of VBK and as a result, would have yielded $6,329 less on a $10,000 investment. Thus, ITOT performed worse than VBK by 1.94% annually.
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