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IVV vs. VEA: What’s The Difference?

The iShares Core S&P 500 ETF (IVV) and the Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) are both among the Top 100 ETFs. IVV is a iShares Large Blend fund and VEA is a Vanguard Foreign Large Blend fund. So, what’s the difference between IVV and VEA? And which fund is better?

The expense ratio of IVV is 0.02 percentage points lower than VEA’s (0.03% vs. 0.05%). IVV also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVV has provided higher returns than VEA over the past ten years.

In this article, we’ll compare IVV vs. VEA. We’ll look at holdings and industry exposure, as well as at their annual returns and performance. Moreover, I’ll also discuss IVV’s and VEA’s risk metrics, portfolio growth, and fund composition and examine how these affect their overall returns.

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Summary

IVVVEA
NameiShares Core S&P 500 ETFVanguard FTSE Developed Markets Index Fund ETF Shares
CategoryLarge BlendForeign Large Blend
IssueriSharesVanguard
AUM294.95B157.48B
Avg. Return14.48%7.05%
Div. Yield1.28%2.49%
Expense Ratio0.03%0.05%

The iShares Core S&P 500 ETF (IVV) is a Large Blend fund that is issued by iShares. It currently has 294.95B total assets under management and has yielded an average annual return of 14.48% over the past 10 years. The fund has a dividend yield of 1.28% with an expense ratio of 0.03%.

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 157.48B total assets under management and has yielded an average annual return of 7.05% over the past 10 years. The fund has a dividend yield of 2.49% with an expense ratio of 0.05%.

IVV’s dividend yield is 1.21% lower than that of VEA (1.28% vs. 2.49%). Also, IVV yielded on average 7.43% more per year over the past decade (14.48% vs. 7.05%). The expense ratio of IVV is 0.02 percentage points lower than VEA’s (0.03% vs. 0.05%).

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Fund Composition

Industry Exposure

IVV vs. VEA - Industry Exposure

IVVVEA
Technology24.64%11.67%
Industrials8.73%15.47%
Energy2.55%4.17%
Communication Services11.24%5.41%
Utilities2.49%3.1%
Healthcare13.52%10.6%
Consumer Defensive6.34%8.61%
Real Estate2.63%4.04%
Financial Services13.86%17.39%
Consumer Cyclical11.74%11.31%
Basic Materials2.27%8.24%

The iShares Core S&P 500 ETF (IVV) has the most exposure to the Technology sector at 24.64%. This is followed by Financial Services and Healthcare at 13.86% and 13.52% respectively. Utilities (2.49%), Energy (2.55%), and Real Estate (2.63%) only make up 7.67% of the fund’s total assets.

IVV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.34%, 8.73%, 11.24%, 11.74%, and 13.52%.

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) has the most exposure to the Financial Services sector at 17.39%. This is followed by Industrials and Technology at 15.47% and 11.67% respectively. Real Estate (4.04%), Energy (4.17%), and Communication Services (5.41%) only make up 13.62% of the fund’s total assets.

VEA’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Consumer Cyclical, and Technology stocks at 8.24%, 8.61%, 10.6%, 11.31%, and 11.67%.

IVV is 12.97% more exposed to the Technology sector than VEA (24.64% vs 11.67%). IVV’s exposure to Financial Services and Healthcare stocks is 3.53% lower and 2.92% higher respectively (13.86% vs. 17.39% and 13.52% vs. 10.6%). In total, Utilities, Energy, and Real Estate also make up 3.64% less of the fund’s holdings compared to VEA (7.67% vs. 11.31%).

Holdings

IVV - Holdings

IVV HoldingsWeight
Apple Inc6.14%
Microsoft Corp5.76%
Amazon.com Inc3.83%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.17%
Alphabet Inc Class C2.07%
Tesla Inc1.42%
Berkshire Hathaway Inc Class B1.42%
NVIDIA Corp1.3%
JPMorgan Chase & Co1.23%

IVV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 6.14%, 5.76%, 3.83%, 2.29%, and 2.17%.

Alphabet Inc Class C (2.07%), Tesla Inc (1.42%), and Berkshire Hathaway Inc Class B (1.42%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IVV’s holdings at 1.3% and 1.23%.

VEA - Holdings

VEA HoldingsWeight
Nestle SA1.5%
Samsung Electronics Co Ltd1.4%
ASML Holding NV1.16%
Roche Holding AG1.1%
Toyota Motor Corp0.92%
LVMH Moet Hennessy Louis Vuitton SE0.84%
Novartis AG0.82%
Shopify Inc A0.7%
AstraZeneca PLC0.67%
SAP SE0.66%

VEA’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.5%, 1.4%, 1.16%, 1.1%, and 0.92%.

LVMH Moet Hennessy Louis Vuitton SE (0.84%), Novartis AG (0.82%), and Shopify Inc A (0.7%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the VEA’s holdings at 0.67% and 0.66%.

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Performance

Annual Returns

IVV vs. VEA - Annual Returns

YearIVVVEA
202018.37%10.29%
201931.44%22.08%
2018-4.42%-14.47%
201721.79%26.44%
201611.9%2.51%
20151.34%-0.21%
201413.62%-5.71%
201332.31%22.12%
201215.91%18.6%
20112.03%-12.57%
201014.96%8.47%

IVV had its best year in 2013 with an annual return of 32.31%. IVV’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the iShares Core S&P 500 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.62%, 14.96%, and 15.91% respectively.

The year 2017 was the strongest year for VEA, returning 26.44% on an annual basis. The poorest year for VEA in the last ten years was 2018, with a yield of -14.47%. Most years the Vanguard FTSE Developed Markets Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.51%, 8.47%, and 10.29% respectively.

Portfolio Growth

IVV vs. VEA - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVV$10,000$41,97614.48%
VEA$10,000$19,2907.05%

A $10,000 investment in IVV would have resulted in a final balance of $41,976. This is a profit of $31,976 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.48%.

With a $10,000 investment in VEA, the end total would have been $19,290. This equates to a $9,290 profit over 11 years and a compound annual growth rate (CAGR) of 7.05%.

IVV’s CAGR is 7.43 percentage points higher than that of VEA and as a result, would have yielded $22,686 more on a $10,000 investment. Thus, IVV outperformed VEA by 7.43% annually.


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