The iShares S&P 500 Value ETF (IVE) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between IVE and DFAC? And which fund is better?
The expense ratio of IVE is 0.01 percentage points lower than DFAC’s (0.18% vs. 0.19%). IVE also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IVE has provided lower returns than DFAC over the past 11 years.
In this article, we’ll compare IVE vs. DFAC. We’ll look at annual returns and performance, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss IVE’s and DFAC’s risk metrics, industry exposure, and holdings and examine how these affect their overall returns.
Summary
| IVE | DFAC | |
| Name | iShares S&P 500 Value ETF | Dimensional U.S. Core Equity 2 ETF |
| Category | Large Value | Large Blend |
| Issuer | iShares | Dimensional Fund Advisors |
| AUM | 22.4B | 13.53B |
| Avg. Return | 11.68% | 13.93% |
| Div. Yield | 1.88% | 1.0% |
| Expense Ratio | 0.18% | 0.19% |
The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
IVE’s dividend yield is 0.88% higher than that of DFAC (1.88% vs. 1.0%). Also, IVE yielded on average 2.25% less per year over the past decade (11.68% vs. 13.93%). The expense ratio of IVE is 0.01 percentage points lower than DFAC’s (0.18% vs. 0.19%).
Fund Composition
Industry Exposure
| IVE | DFAC | |
| Technology | 9.41% | 22.81% |
| Industrials | 12.19% | 14.13% |
| Energy | 5.43% | 2.67% |
| Communication Services | 6.4% | 7.63% |
| Utilities | 4.82% | 1.54% |
| Healthcare | 15.4% | 12.09% |
| Consumer Defensive | 9.23% | 5.94% |
| Real Estate | 4.38% | 0.37% |
| Financial Services | 22.06% | 16.17% |
| Consumer Cyclical | 7.68% | 13.09% |
| Basic Materials | 2.99% | 3.56% |
The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
IVE is 5.89% more exposed to the Financial Services sector than DFAC (22.06% vs 16.17%). IVE’s exposure to Healthcare and Industrials stocks is 3.31% higher and 1.94% lower respectively (15.4% vs. 12.09% and 12.19% vs. 14.13%). In total, Real Estate, Utilities, and Energy also make up 10.05% more of the fund’s holdings compared to DFAC (14.63% vs. 4.58%).
Holdings
| IVE Holdings | Weight |
| Berkshire Hathaway Inc Class B | 3.05% |
| JPMorgan Chase & Co | 2.65% |
| The Walt Disney Co | 1.85% |
| Bank of America Corp | 1.67% |
| Johnson & Johnson | 1.57% |
| Exxon Mobil Corp | 1.41% |
| Pfizer Inc | 1.38% |
| Cisco Systems Inc | 1.35% |
| Verizon Communications Inc | 1.33% |
| Intel Corp | 1.25% |
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
| DFAC Holdings | Weight |
| Apple Inc | 4.7% |
| Microsoft Corp | 3.81% |
| Amazon.com Inc | 2.39% |
| Johnson & Johnson | 1.05% |
| Facebook Inc Class A | 1.05% |
| JPMorgan Chase & Co | 1.0% |
| Alphabet Inc Class C | 0.85% |
| Alphabet Inc Class A | 0.84% |
| Berkshire Hathaway Inc Class B | 0.75% |
| Visa Inc Class A | 0.74% |
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
Risk Analysis
| IVE | DFAC | |
| Mean Return | 1.05 | 1.19 |
| R-squared | 92.08 | 95.1 |
| Std. Deviation | 14.3 | 15.55 |
| Alpha | -2.9 | -2.75 |
| Beta | 1.01 | 1.12 |
| Sharpe Ratio | 0.83 | 0.88 |
| Treynor Ratio | 11.41 | 11.85 |
The iShares S&P 500 Value ETF (IVE) has a Standard Deviation of 14.3 with a Mean Return of 1.05 and a Beta of 1.01. Its Alpha is -2.9 while IVE’s R-squared is 92.08. Furthermore, the fund has a Treynor Ratio of 11.41 and a Sharpe Ratio of 0.83.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Alpha of -2.75 with a Treynor Ratio of 11.85 and a Standard Deviation of 15.55. Its Beta is 1.12 while DFAC’s Mean Return is 1.19. Furthermore, the fund has a R-squared of 95.1 and a Sharpe Ratio of 0.88.
IVE’s Mean Return is 0.14 points lower than that of DFAC and its R-squared is 3.02 points lower. With a Standard Deviation of 14.3, IVE is slightly less volatile than DFAC. The Alpha and Beta of IVE are 0.15 points lower and 0.11 points lower than DFAC’s Alpha and Beta.
Performance
Annual Returns
| Year | IVE | DFAC |
| 2020 | 1.24% | 15.8% |
| 2019 | 31.71% | 29.54% |
| 2018 | -9.09% | -9.43% |
| 2017 | 15.19% | 18.82% |
| 2016 | 17.17% | 16.31% |
| 2015 | -3.24% | -2.53% |
| 2014 | 12.14% | 9.56% |
| 2013 | 31.69% | 37.55% |
| 2012 | 17.45% | 17.93% |
| 2011 | -0.63% | -1.96% |
| 2010 | 14.9% | 21.67% |
IVE had its best year in 2019 with an annual return of 31.71%. IVE’s worst year over the past decade yielded -9.09% and occurred in 2018. In most years the iShares S&P 500 Value ETF provided moderate returns such as in 2014, 2010, and 2017 where annual returns amounted to 12.14%, 14.9%, and 15.19% respectively.
The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IVE | $10,000 | $31,350 | 11.68% |
| DFAC | $10,000 | $38,796 | 13.93% |
A $10,000 investment in IVE would have resulted in a final balance of $31,350. This is a profit of $21,350 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.68%.
With a $10,000 investment in DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.
IVE’s CAGR is 2.25 percentage points lower than that of DFAC and as a result, would have yielded $7,446 less on a $10,000 investment. Thus, IVE performed worse than DFAC by 2.25% annually.
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