The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between ITOT and VXF? And which fund is better?
The expense ratio of ITOT is 0.03 percentage points lower than VXF’s (0.03% vs. 0.06%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided lower returns than VXF over the past ten years.
In this article, we’ll compare ITOT vs. VXF. We’ll look at holdings and performance, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss ITOT’s and VXF’s portfolio growth, risk metrics, and annual returns and examine how these affect their overall returns.
Summary
| ITOT | VXF | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Vanguard Extended Market Index Fund ETF Shares |
| Category | Large Blend | Mid-Cap Growth |
| Issuer | iShares | Vanguard |
| AUM | 41.97B | 114.53B |
| Avg. Return | 14.59% | 15.47% |
| Div. Yield | 1.2% | 1.19% |
| Expense Ratio | 0.03% | 0.06% |
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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
ITOT’s dividend yield is 0.01% higher than that of VXF (1.2% vs. 1.19%). Also, ITOT yielded on average 0.88% less per year over the past decade (14.59% vs. 15.47%). The expense ratio of ITOT is 0.03 percentage points lower than VXF’s (0.03% vs. 0.06%).
Fund Composition
Industry Exposure
| ITOT | VXF | |
| Technology | 24.49% | 23.61% |
| Industrials | 9.21% | 11.31% |
| Energy | 2.51% | 2.46% |
| Communication Services | 10.54% | 7.29% |
| Utilities | 2.35% | 1.65% |
| Healthcare | 13.59% | 15.25% |
| Consumer Defensive | 5.79% | 3.09% |
| Real Estate | 3.67% | 8.16% |
| Financial Services | 13.69% | 12.56% |
| Consumer Cyclical | 11.69% | 11.35% |
| Basic Materials | 2.47% | 3.26% |
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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
ITOT is 0.88% more exposed to the Technology sector than VXF (24.49% vs 23.61%). ITOT’s exposure to Financial Services and Healthcare stocks is 1.13% higher and 1.66% lower respectively (13.69% vs. 12.56% and 13.59% vs. 15.25%). In total, Basic Materials, Energy, and Real Estate also make up 5.23% less of the fund’s holdings compared to VXF (8.65% vs. 13.88%).
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%.
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
Risk Analysis
| ITOT | VXF | |
| Mean Return | 1.27 | 1.24 |
| R-squared | 99.4 | 85.73 |
| Std. Deviation | 14.02 | 18.04 |
| Alpha | -0.54 | -3.26 |
| Beta | 1.03 | 1.23 |
| Sharpe Ratio | 1.04 | 0.79 |
| Treynor Ratio | 14.13 | 10.92 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Treynor Ratio of 14.13 with a R-squared of 99.4 and a Mean Return of 1.27. Its Beta is 1.03 while ITOT’s Standard Deviation is 14.02. Furthermore, the fund has a Alpha of -0.54 and a Sharpe Ratio of 1.04.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Beta of 1.23 with a R-squared of 85.73 and a Treynor Ratio of 10.92. Its Sharpe Ratio is 0.79 while VXF’s Alpha is -3.26. Furthermore, the fund has a Standard Deviation of 18.04 and a Mean Return of 1.24.
ITOT’s Mean Return is 0.03 points higher than that of VXF and its R-squared is 13.67 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than VXF. The Alpha and Beta of ITOT are 2.72 points higher and 0.20 points lower than VXF’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | VXF |
| 2020 | 20.75% | 32.19% |
| 2019 | 30.87% | 28.04% |
| 2018 | -5.27% | -9.37% |
| 2017 | 21.23% | 18.1% |
| 2016 | 12.59% | 16.16% |
| 2015 | 0.96% | -3.26% |
| 2014 | 13.01% | 7.55% |
| 2013 | 32.67% | 38.37% |
| 2012 | 15.98% | 18.48% |
| 2011 | 1.55% | -3.61% |
| 2010 | 16.15% | 27.55% |
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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| VXF | $10,000 | $44,130 | 15.47% |
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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
ITOT’s CAGR is 0.88 percentage points lower than that of VXF and as a result, would have yielded $1,820 less on a $10,000 investment. Thus, ITOT performed worse than VXF by 0.88% annually.
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