The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between ITOT and VT? And which fund is better?
The expense ratio of ITOT is 0.05 percentage points lower than VT’s (0.03% vs. 0.08%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than VT over the past ten years.
In this article, we’ll compare ITOT vs. VT. We’ll look at industry exposure and fund composition, as well as at their holdings and risk metrics. Moreover, I’ll also discuss ITOT’s and VT’s performance, annual returns, and portfolio growth and examine how these affect their overall returns.
Summary
| ITOT | VT | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Vanguard Total World Stock Index Fund ETF Shares |
| Category | Large Blend | N/A |
| Issuer | iShares | Vanguard |
| AUM | 41.97B | 30.44B |
| Avg. Return | 14.59% | 10.42% |
| Div. Yield | 1.2% | 1.65% |
| Expense Ratio | 0.03% | 0.08% |
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
ITOT’s dividend yield is 0.45% lower than that of VT (1.2% vs. 1.65%). Also, ITOT yielded on average 4.17% more per year over the past decade (14.59% vs. 10.42%). The expense ratio of ITOT is 0.05 percentage points lower than VT’s (0.03% vs. 0.08%).
Fund Composition
Industry Exposure
| ITOT | VT | |
| Technology | 24.49% | 19.63% |
| Industrials | 9.21% | 10.7% |
| Energy | 2.51% | 3.48% |
| Communication Services | 10.54% | 9.02% |
| Utilities | 2.35% | 2.6% |
| Healthcare | 13.59% | 11.58% |
| Consumer Defensive | 5.79% | 6.71% |
| Real Estate | 3.67% | 3.64% |
| Financial Services | 13.69% | 15.36% |
| Consumer Cyclical | 11.69% | 12.32% |
| Basic Materials | 2.47% | 4.97% |
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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
ITOT is 4.86% more exposed to the Technology sector than VT (24.49% vs 19.63%). ITOT’s exposure to Financial Services and Healthcare stocks is 1.67% lower and 2.01% higher respectively (13.69% vs. 15.36% and 13.59% vs. 11.58%). In total, Basic Materials, Energy, and Real Estate also make up 3.44% less of the fund’s holdings compared to VT (8.65% vs. 12.09%).
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%.
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
Risk Analysis
| ITOT | VT | |
| Mean Return | 1.27 | 0.9 |
| R-squared | 99.4 | 99.35 |
| Std. Deviation | 14.02 | 14.19 |
| Alpha | -0.54 | 0.2 |
| Beta | 1.03 | 1.01 |
| Sharpe Ratio | 1.04 | 0.71 |
| Treynor Ratio | 14.13 | 9.5 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Sharpe Ratio of 1.04 with a Standard Deviation of 14.02 and a Mean Return of 1.27. Its R-squared is 99.4 while ITOT’s Treynor Ratio is 14.13. Furthermore, the fund has a Beta of 1.03 and a Alpha of -0.54.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a R-squared of 99.35 with a Standard Deviation of 14.19 and a Beta of 1.01. Its Sharpe Ratio is 0.71 while VT’s Alpha is 0.2. Furthermore, the fund has a Treynor Ratio of 9.5 and a Mean Return of 0.9.
ITOT’s Mean Return is 0.37 points higher than that of VT and its R-squared is 0.05 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than VT. The Alpha and Beta of ITOT are 0.74 points lower and 0.02 points higher than VT’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | VT |
| 2020 | 20.75% | 16.74% |
| 2019 | 30.87% | 26.8% |
| 2018 | -5.27% | -9.67% |
| 2017 | 21.23% | 24.19% |
| 2016 | 12.59% | 8.77% |
| 2015 | 0.96% | -1.88% |
| 2014 | 13.01% | 3.97% |
| 2013 | 32.67% | 22.98% |
| 2012 | 15.98% | 17.33% |
| 2011 | 1.55% | -7.71% |
| 2010 | 16.15% | 13.05% |
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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| VT | $10,000 | $27,739 | 10.42% |
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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
ITOT’s CAGR is 4.17 percentage points higher than that of VT and as a result, would have yielded $14,571 more on a $10,000 investment. Thus, ITOT outperformed VT by 4.17% annually.
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