The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between ITOT and VOE? And which fund is better?
The expense ratio of ITOT is 0.04 percentage points lower than VOE’s (0.03% vs. 0.07%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than VOE over the past ten years.
In this article, we’ll compare ITOT vs. VOE. We’ll look at annual returns and performance, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss ITOT’s and VOE’s risk metrics, industry exposure, and fund composition and examine how these affect their overall returns.
Summary
| ITOT | VOE | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Vanguard Mid-Cap Value Index Fund ETF Shares |
| Category | Large Blend | Mid-Cap Value |
| Issuer | iShares | Vanguard |
| AUM | 41.97B | 26.78B |
| Avg. Return | 14.59% | 12.52% |
| Div. Yield | 1.2% | 1.87% |
| 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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
ITOT’s dividend yield is 0.67% lower than that of VOE (1.2% vs. 1.87%). Also, ITOT yielded on average 2.07% more per year over the past decade (14.59% vs. 12.52%). The expense ratio of ITOT is 0.04 percentage points lower than VOE’s (0.03% vs. 0.07%).
Fund Composition
Industry Exposure
| ITOT | VOE | |
| Technology | 24.49% | 9.85% |
| Industrials | 9.21% | 9.4% |
| Energy | 2.51% | 5.69% |
| Communication Services | 10.54% | 5.27% |
| Utilities | 2.35% | 10.93% |
| Healthcare | 13.59% | 7.04% |
| Consumer Defensive | 5.79% | 4.85% |
| Real Estate | 3.67% | 11.48% |
| Financial Services | 13.69% | 18.26% |
| Consumer Cyclical | 11.69% | 11.8% |
| Basic Materials | 2.47% | 5.44% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
ITOT is 14.64% more exposed to the Technology sector than VOE (24.49% vs 9.85%). ITOT’s exposure to Financial Services and Healthcare stocks is 4.57% lower and 6.55% higher respectively (13.69% vs. 18.26% and 13.59% vs. 7.04%). In total, Basic Materials, Energy, and Real Estate also make up 13.96% less of the fund’s holdings compared to VOE (8.65% vs. 22.61%).
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%.
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
Risk Analysis
| ITOT | VOE | |
| Mean Return | 1.27 | 1.05 |
| R-squared | 99.4 | 88.76 |
| Std. Deviation | 14.02 | 15.98 |
| Alpha | -0.54 | -3.77 |
| Beta | 1.03 | 1.11 |
| Sharpe Ratio | 1.04 | 0.75 |
| Treynor Ratio | 14.13 | 10.19 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Sharpe Ratio of 1.04 with a Beta of 1.03 and a R-squared of 99.4. Its Alpha is -0.54 while ITOT’s Standard Deviation is 14.02. Furthermore, the fund has a Mean Return of 1.27 and a Treynor Ratio of 14.13.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Treynor Ratio of 10.19 with a Standard Deviation of 15.98 and a Alpha of -3.77. Its Beta is 1.11 while VOE’s Mean Return is 1.05. Furthermore, the fund has a R-squared of 88.76 and a Sharpe Ratio of 0.75.
ITOT’s Mean Return is 0.22 points higher than that of VOE and its R-squared is 10.64 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than VOE. The Alpha and Beta of ITOT are 3.23 points higher and 0.08 points lower than VOE’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | VOE |
| 2020 | 20.75% | 2.5% |
| 2019 | 30.87% | 27.98% |
| 2018 | -5.27% | -12.41% |
| 2017 | 21.23% | 17.05% |
| 2016 | 12.59% | 15.26% |
| 2015 | 0.96% | -1.8% |
| 2014 | 13.01% | 13.98% |
| 2013 | 32.67% | 37.65% |
| 2012 | 15.98% | 16.04% |
| 2011 | 1.55% | -0.32% |
| 2010 | 16.15% | 21.83% |
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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| VOE | $10,000 | $33,655 | 12.52% |
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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
ITOT’s CAGR is 2.07 percentage points higher than that of VOE and as a result, would have yielded $8,655 more on a $10,000 investment. Thus, ITOT outperformed VOE by 2.07% annually.
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