The iShares S&P 500 Value ETF (IVE) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and VHT is a Vanguard Health fund. So, what’s the difference between IVE and VHT? And which fund is better?
The expense ratio of IVE is 0.08 percentage points higher than VHT’s (0.18% vs. 0.1%). IVE also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IVE has provided lower returns than VHT over the past 11 years.
In this article, we’ll compare IVE vs. VHT. We’ll look at performance and annual returns, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss IVE’s and VHT’s portfolio growth, holdings, and industry exposure and examine how these affect their overall returns.
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|Name||iShares S&P 500 Value ETF||Vanguard Health Care Index Fund ETF Shares|
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 Vanguard Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
IVE’s dividend yield is 0.73% higher than that of VHT (1.88% vs. 1.15%). Also, IVE yielded on average 4.35% less per year over the past decade (11.68% vs. 16.04%). The expense ratio of IVE is 0.08 percentage points higher than VHT’s (0.18% vs. 0.1%).
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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 Vanguard Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
IVE is 22.04% more exposed to the Financial Services sector than VHT (22.06% vs 0.02%). IVE’s exposure to Healthcare and Industrials stocks is 84.17% lower and 12.14% higher respectively (15.4% vs. 99.57% and 12.19% vs. 0.05%). In total, Real Estate, Utilities, and Energy also make up 14.63% more of the fund’s holdings compared to VHT (14.63% vs. 0.00%).
|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%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
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%.
|Johnson & Johnson||7.34%|
|UnitedHealth Group Inc||6.44%|
|Thermo Fisher Scientific Inc||3.37%|
|Merck & Co Inc||3.33%|
|Eli Lilly and Co||3.17%|
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
The iShares S&P 500 Value ETF (IVE) has a Treynor Ratio of 11.41 with a Standard Deviation of 14.3 and a Alpha of -2.9. Its Mean Return is 1.05 while IVE’s R-squared is 92.08. Furthermore, the fund has a Sharpe Ratio of 0.83 and a Beta of 1.01.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a R-squared of 59.86 with a Sharpe Ratio of 1.13 and a Treynor Ratio of 20.74. Its Mean Return is 1.33 while VHT’s Standard Deviation is 13.58. Furthermore, the fund has a Alpha of 7.99 and a Beta of 0.75.
IVE’s Mean Return is 0.28 points lower than that of VHT and its R-squared is 32.22 points higher. With a Standard Deviation of 14.3, IVE is slightly more volatile than VHT. The Alpha and Beta of IVE are 10.89 points lower and 0.26 points higher than VHT’s Alpha and Beta.
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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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
IVE’s CAGR is 4.35 percentage points lower than that of VHT and as a result, would have yielded $17,114 less on a $10,000 investment. Thus, IVE performed worse than VHT by 4.35% annually.
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