The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and VV is a Vanguard Large Blend fund. So, what’s the difference between ITOT and VV? And which fund is better?
The expense ratio of ITOT is 0.01 percentage points lower than VV’s (0.03% vs. 0.04%). ITOT also has a lower exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided lower returns than VV over the past ten years.
In this article, we’ll compare ITOT vs. VV. We’ll look at risk metrics and portfolio growth, as well as at their industry exposure and holdings. Moreover, I’ll also discuss ITOT’s and VV’s performance, fund composition, and annual returns and examine how these affect their overall returns.
|Name||iShares Core S&P Total U.S. Stock Market ETF||Vanguard Large-Cap Index Fund ETF Shares|
|Category||Large Blend||Large Blend|
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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.
ITOT’s dividend yield is 0.06% lower than that of VV (1.2% vs. 1.26%). Also, ITOT yielded on average 0.16% less per year over the past decade (14.59% vs. 14.75%). The expense ratio of ITOT is 0.01 percentage points lower than VV’s (0.03% vs. 0.04%).
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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 Vanguard Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.
VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.
ITOT is 0.89% less exposed to the Technology sector than VV (24.49% vs 25.38%). ITOT’s exposure to Financial Services and Healthcare stocks is 0.13% lower and 0.37% higher respectively (13.69% vs. 13.82% and 13.59% vs. 13.22%). In total, Basic Materials, Energy, and Real Estate also make up 1.20% more of the fund’s holdings compared to VV (8.65% vs. 7.45%).
|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%.
|Facebook Inc Class A||2.19%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.81%|
|Berkshire Hathaway Inc Class B||1.3%|
|JPMorgan Chase & Co||1.24%|
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
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The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Treynor Ratio of 14.13 with a Sharpe Ratio of 1.04 and a Standard Deviation of 14.02. Its R-squared is 99.4 while ITOT’s Alpha is -0.54. Furthermore, the fund has a Mean Return of 1.27 and a Beta of 1.03.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Sharpe Ratio of 1.04 with a Mean Return of 1.24 and a Treynor Ratio of 14.14. Its Standard Deviation is 13.75 while VV’s Beta is 1.01. Furthermore, the fund has a Alpha of -0.08 and a R-squared of 99.86.
ITOT’s Mean Return is 0.03 points higher than that of VV and its R-squared is 0.46 points lower. With a Standard Deviation of 14.02, ITOT is slightly more volatile than VV. The Alpha and Beta of ITOT are 0.46 points lower and 0.02 points higher than VV’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 2013 was the strongest year for VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% 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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.
ITOT’s CAGR is 0.16 percentage points lower than that of VV and as a result, would have yielded $660 less on a $10,000 investment. Thus, ITOT performed worse than VV by 0.16% annually.
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