The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between ITOT and VLUE? And which fund is better?
The expense ratio of ITOT is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%). ITOT also has a lower exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided higher returns than VLUE over the past ten years.
In this article, we’ll compare ITOT vs. VLUE. We’ll look at annual returns and risk metrics, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss ITOT’s and VLUE’s fund composition, performance, and holdings and examine how these affect their overall returns.
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Summary
| ITOT | VLUE | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares MSCI USA Value Factor ETF |
| Category | Large Blend | Large Value |
| Issuer | iShares | iShares |
| AUM | 41.97B | 15.95B |
| Avg. Return | 14.59% | 8.91% |
| Div. Yield | 1.2% | 1.89% |
| Expense Ratio | 0.03% | 0.15% |
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 USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
ITOT’s dividend yield is 0.69% lower than that of VLUE (1.2% vs. 1.89%). Also, ITOT yielded on average 5.68% more per year over the past decade (14.59% vs. 8.91%). The expense ratio of ITOT is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%).
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Fund Composition
Industry Exposure
| ITOT | VLUE | |
| Technology | 24.49% | 26.89% |
| Industrials | 9.21% | 9.14% |
| Energy | 2.51% | 2.42% |
| Communication Services | 10.54% | 10.39% |
| Utilities | 2.35% | 2.68% |
| Healthcare | 13.59% | 14.31% |
| Consumer Defensive | 5.79% | 7.22% |
| Real Estate | 3.67% | 3.19% |
| Financial Services | 13.69% | 10.96% |
| Consumer Cyclical | 11.69% | 10.66% |
| Basic Materials | 2.47% | 2.14% |
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 USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
ITOT is 2.40% less exposed to the Technology sector than VLUE (24.49% vs 26.89%). ITOT’s exposure to Financial Services and Healthcare stocks is 2.73% higher and 0.72% lower respectively (13.69% vs. 10.96% and 13.59% vs. 14.31%). In total, Basic Materials, Energy, and Real Estate also make up 0.90% more of the fund’s holdings compared to VLUE (8.65% vs. 7.75%).
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%.
| VLUE Holdings | Weight |
| AT&T Inc | 7.13% |
| Intel Corp | 6.14% |
| General Motors Co | 3.19% |
| Micron Technology Inc | 3.14% |
| Cisco Systems Inc | 3.05% |
| International Business Machines Corp | 2.76% |
| Target Corp | 2.38% |
| Citigroup Inc | 2.32% |
| Ford Motor Co | 2.23% |
| Pfizer Inc | 2.17% |
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
Risk Analysis
| ITOT | VLUE | |
| Mean Return | 1.27 | 0 |
| R-squared | 99.4 | 0 |
| Std. Deviation | 14.02 | 0 |
| Alpha | -0.54 | 0 |
| Beta | 1.03 | 0 |
| Sharpe Ratio | 1.04 | 0 |
| Treynor Ratio | 14.13 | 0 |
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 Sharpe Ratio is 1.04 while ITOT’s Alpha is -0.54. Furthermore, the fund has a Treynor Ratio of 14.13 and a Mean Return of 1.27.
The iShares MSCI USA Value Factor ETF (VLUE) has a Beta of 0 with a Standard Deviation of 0 and a Mean Return of 0. Its Sharpe Ratio is 0 while VLUE’s R-squared is 0. Furthermore, the fund has a Alpha of 0 and a Treynor Ratio of 0.
ITOT’s Mean Return is 1.27 points higher than that of VLUE and its R-squared is 99.40 points higher. With a Standard Deviation of 14.02, ITOT is slightly more volatile than VLUE. The Alpha and Beta of ITOT are 0.54 points lower and 1.03 points higher than VLUE’s Alpha and Beta.
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Performance
Annual Returns
| Year | ITOT | VLUE |
| 2020 | 20.75% | -0.32% |
| 2019 | 30.87% | 27.47% |
| 2018 | -5.27% | -11.18% |
| 2017 | 21.23% | 21.97% |
| 2016 | 12.59% | 15.68% |
| 2015 | 0.96% | -3.54% |
| 2014 | 13.01% | 12.29% |
| 2013 | 32.67% | 0.0% |
| 2012 | 15.98% | 0.0% |
| 2011 | 1.55% | 0.0% |
| 2010 | 16.15% | 0.0% |
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 VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $23,312 | 14.59% |
| VLUE | $10,000 | $17,247 | 8.91% |
A $10,000 investment in ITOT would have resulted in a final balance of $23,312. This is a profit of $13,312 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.59%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
ITOT’s CAGR is 5.68 percentage points higher than that of VLUE and as a result, would have yielded $6,065 more on a $10,000 investment. Thus, ITOT outperformed VLUE by 5.68% annually.
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