The iShares S&P 500 Value ETF (IVE) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between IVE and VOE? And which fund is better?
The expense ratio of IVE is 0.11 percentage points higher than VOE’s (0.18% vs. 0.07%). IVE also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IVE has provided lower returns than VOE over the past 11 years.
In this article, we’ll compare IVE vs. VOE. We’ll look at annual returns and fund composition, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss IVE’s and VOE’s performance, risk metrics, and holdings and examine how these affect their overall returns.
Summary
| IVE | VOE | |
| Name | iShares S&P 500 Value ETF | Vanguard Mid-Cap Value Index Fund ETF Shares |
| Category | Large Value | Mid-Cap Value |
| Issuer | iShares | Vanguard |
| AUM | 22.4B | 26.78B |
| Avg. Return | 11.68% | 12.52% |
| Div. Yield | 1.88% | 1.87% |
| Expense Ratio | 0.18% | 0.07% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
IVE’s dividend yield is 0.01% higher than that of VOE (1.88% vs. 1.87%). Also, IVE yielded on average 0.84% less per year over the past decade (11.68% vs. 12.52%). The expense ratio of IVE is 0.11 percentage points higher than VOE’s (0.18% vs. 0.07%).
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Fund Composition
Industry Exposure
| IVE | VOE | |
| Technology | 9.41% | 9.85% |
| Industrials | 12.19% | 9.4% |
| Energy | 5.43% | 5.69% |
| Communication Services | 6.4% | 5.27% |
| Utilities | 4.82% | 10.93% |
| Healthcare | 15.4% | 7.04% |
| Consumer Defensive | 9.23% | 4.85% |
| Real Estate | 4.38% | 11.48% |
| Financial Services | 22.06% | 18.26% |
| Consumer Cyclical | 7.68% | 11.8% |
| Basic Materials | 2.99% | 5.44% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
IVE is 3.80% more exposed to the Financial Services sector than VOE (22.06% vs 18.26%). IVE’s exposure to Healthcare and Industrials stocks is 8.36% higher and 2.79% higher respectively (15.4% vs. 7.04% and 12.19% vs. 9.4%). In total, Real Estate, Utilities, and Energy also make up 13.47% less of the fund’s holdings compared to VOE (14.63% vs. 28.10%).
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%.
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
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Risk Analysis
| IVE | VOE | |
| Mean Return | 1.05 | 1.05 |
| R-squared | 92.08 | 88.76 |
| Std. Deviation | 14.3 | 15.98 |
| Alpha | -2.9 | -3.77 |
| Beta | 1.01 | 1.11 |
| Sharpe Ratio | 0.83 | 0.75 |
| Treynor Ratio | 11.41 | 10.19 |
The iShares S&P 500 Value ETF (IVE) has a Beta of 1.01 with a Alpha of -2.9 and a Sharpe Ratio of 0.83. Its Treynor Ratio is 11.41 while IVE’s Standard Deviation is 14.3. Furthermore, the fund has a R-squared of 92.08 and a Mean Return of 1.05.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Mean Return of 1.05 with a R-squared of 88.76 and a Treynor Ratio of 10.19. Its Alpha is -3.77 while VOE’s Standard Deviation is 15.98. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Beta of 1.11.
IVE’s Mean Return is 0.00 points lower than that of VOE and its R-squared is 3.32 points higher. With a Standard Deviation of 14.3, IVE is slightly less volatile than VOE. The Alpha and Beta of IVE are 0.87 points higher and 0.10 points lower than VOE’s Alpha and Beta.
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Performance
Annual Returns
| Year | IVE | VOE |
| 2020 | 1.24% | 2.5% |
| 2019 | 31.71% | 27.98% |
| 2018 | -9.09% | -12.41% |
| 2017 | 15.19% | 17.05% |
| 2016 | 17.17% | 15.26% |
| 2015 | -3.24% | -1.8% |
| 2014 | 12.14% | 13.98% |
| 2013 | 31.69% | 37.65% |
| 2012 | 17.45% | 16.04% |
| 2011 | -0.63% | -0.32% |
| 2010 | 14.9% | 21.83% |
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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IVE | $10,000 | $31,350 | 11.68% |
| VOE | $10,000 | $33,655 | 12.52% |
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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
IVE’s CAGR is 0.84 percentage points lower than that of VOE and as a result, would have yielded $2,305 less on a $10,000 investment. Thus, IVE performed worse than VOE by 0.84% annually.
Current recommendations:
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