The iShares Core S&P 500 ETF (IVV) and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) are both among the Top 100 ETFs. IVV is a iShares Large Blend fund and VIG is a Vanguard Large Blend fund. So, what’s the difference between IVV and VIG? And which fund is better?
The expense ratio of IVV is 0.03 percentage points lower than VIG’s (0.03% vs. 0.06%). IVV also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVV has provided higher returns than VIG over the past ten years.
In this article, we’ll compare IVV vs. VIG. We’ll look at risk metrics and fund composition, as well as at their portfolio growth and performance. Moreover, I’ll also discuss IVV’s and VIG’s annual returns, industry exposure, and holdings and examine how these affect their overall returns.
Summary
| IVV | VIG | |
| Name | iShares Core S&P 500 ETF | Vanguard Dividend Appreciation Index Fund ETF Shares |
| Category | Large Blend | Large Blend |
| Issuer | iShares | Vanguard |
| AUM | 294.95B | 71.92B |
| Avg. Return | 14.48% | 13.35% |
| Div. Yield | 1.28% | 1.56% |
| Expense Ratio | 0.03% | 0.06% |
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 Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.
IVV’s dividend yield is 0.28% lower than that of VIG (1.28% vs. 1.56%). Also, IVV yielded on average 1.13% more per year over the past decade (14.48% vs. 13.35%). The expense ratio of IVV is 0.03 percentage points lower than VIG’s (0.03% vs. 0.06%).
Fund Composition
Industry Exposure
| IVV | VIG | |
| Technology | 24.64% | 14.93% |
| Industrials | 8.73% | 17.23% |
| Energy | 2.55% | 0.0% |
| Communication Services | 11.24% | 2.86% |
| Utilities | 2.49% | 2.81% |
| Healthcare | 13.52% | 15.52% |
| Consumer Defensive | 6.34% | 15.32% |
| Real Estate | 2.63% | 0.0% |
| Financial Services | 13.86% | 17.18% |
| Consumer Cyclical | 11.74% | 10.47% |
| Basic Materials | 2.27% | 3.67% |
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 Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.
VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.
IVV is 9.71% more exposed to the Technology sector than VIG (24.64% vs 14.93%). IVV’s exposure to Financial Services and Healthcare stocks is 3.32% lower and 2.00% lower respectively (13.86% vs. 17.18% and 13.52% vs. 15.52%). In total, Utilities, Energy, and Real Estate also make up 4.86% more of the fund’s holdings compared to VIG (7.67% vs. 2.81%).
Holdings
| IVV Holdings | Weight |
| Apple Inc | 6.14% |
| Microsoft Corp | 5.76% |
| Amazon.com Inc | 3.83% |
| Facebook Inc Class A | 2.29% |
| Alphabet Inc Class A | 2.17% |
| Alphabet Inc Class C | 2.07% |
| Tesla Inc | 1.42% |
| Berkshire Hathaway Inc Class B | 1.42% |
| NVIDIA Corp | 1.3% |
| JPMorgan Chase & Co | 1.23% |
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%.
| VIG Holdings | Weight |
| Microsoft Corp | 4.19% |
| JPMorgan Chase & Co | 3.8% |
| Johnson & Johnson | 3.67% |
| Walmart Inc | 3.38% |
| Visa Inc Class A | 3.22% |
| UnitedHealth Group Inc | 3.22% |
| The Home Depot Inc | 2.91% |
| Procter & Gamble Co | 2.82% |
| Comcast Corp Class A | 2.21% |
| Coca-Cola Co | 1.98% |
VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.
UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.
Performance
Annual Returns
| Year | IVV | VIG |
| 2020 | 18.37% | 15.46% |
| 2019 | 31.44% | 29.71% |
| 2018 | -4.42% | -2.02% |
| 2017 | 21.79% | 22.22% |
| 2016 | 11.9% | 11.84% |
| 2015 | 1.34% | -1.95% |
| 2014 | 13.62% | 10.06% |
| 2013 | 32.31% | 28.99% |
| 2012 | 15.91% | 11.61% |
| 2011 | 2.03% | 6.21% |
| 2010 | 14.96% | 14.67% |
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 2019 was the strongest year for VIG, returning 29.71% on an annual basis. The poorest year for VIG in the last ten years was 2018, with a yield of -2.02%. Most years the Vanguard Dividend Appreciation Index Fund ETF Shares has given investors modest returns, such as in 2012, 2016, and 2010, when gains were 11.61%, 11.84%, and 14.67% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IVV | $10,000 | $41,976 | 14.48% |
| VIG | $10,000 | $37,951 | 13.35% |
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 VIG, the end total would have been $37,951. This equates to a $27,951 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.
IVV’s CAGR is 1.13 percentage points higher than that of VIG and as a result, would have yielded $4,025 more on a $10,000 investment. Thus, IVV outperformed VIG by 1.13% annually.
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