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IVV vs. VUG: What’s The Difference?

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

The expense ratio of IVV is 0.01 percentage points lower than VUG’s (0.03% vs. 0.04%). IVV also has a lower exposure to the technology sector and a lower standard deviation. Overall, IVV has provided lower returns than VUG over the past ten years.

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

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Summary

IVVVUG
NameiShares Core S&P 500 ETFVanguard Growth Index Fund ETF Shares
CategoryLarge BlendLarge Growth
IssueriSharesVanguard
AUM294.95B165.53B
Avg. Return14.48%17.58%
Div. Yield1.28%0.57%
Expense Ratio0.03%0.04%

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 Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.

IVV’s dividend yield is 0.71% higher than that of VUG (1.28% vs. 0.57%). Also, IVV yielded on average 3.10% less per year over the past decade (14.48% vs. 17.58%). The expense ratio of IVV is 0.01 percentage points lower than VUG’s (0.03% vs. 0.04%).

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Fund Composition

Industry Exposure

IVV vs. VUG - Industry Exposure

IVVVUG
Technology24.64%39.05%
Industrials8.73%5.13%
Energy2.55%0.32%
Communication Services11.24%16.49%
Utilities2.49%0.0%
Healthcare13.52%8.09%
Consumer Defensive6.34%2.41%
Real Estate2.63%2.46%
Financial Services13.86%6.75%
Consumer Cyclical11.74%17.78%
Basic Materials2.27%1.52%

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 Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.

VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.

IVV is 14.41% less exposed to the Technology sector than VUG (24.64% vs 39.05%). IVV’s exposure to Financial Services and Healthcare stocks is 7.11% higher and 5.43% higher respectively (13.86% vs. 6.75% and 13.52% vs. 8.09%). In total, Utilities, Energy, and Real Estate also make up 4.89% more of the fund’s holdings compared to VUG (7.67% vs. 2.78%).

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%.

VUG - Holdings

VUG HoldingsWeight
Apple Inc10.13%
Microsoft Corp9.52%
Amazon.com Inc6.88%
Facebook Inc Class A3.89%
Alphabet Inc Class A3.43%
Alphabet Inc Class C3.22%
Tesla Inc2.44%
NVIDIA Corp2.21%
Visa Inc Class A1.78%
PayPal Holdings Inc1.6%

VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.

Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.

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Performance

Annual Returns

IVV vs. VUG - Annual Returns

YearIVVVUG
202018.37%40.16%
201931.44%37.26%
2018-4.42%-3.32%
201721.79%27.8%
201611.9%6.13%
20151.34%3.32%
201413.62%13.62%
201332.31%32.38%
201215.91%17.03%
20112.03%1.87%
201014.96%17.11%

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 2020 was the strongest year for VUG, returning 40.16% on an annual basis. The poorest year for VUG in the last ten years was 2018, with a yield of -3.32%. Most years the Vanguard Growth Index Fund ETF Shares has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.62%, 17.03%, and 17.11% respectively.

Portfolio Growth

IVV vs. VUG - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVV$10,000$41,97614.48%
VUG$10,000$54,73517.58%

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 VUG, the end total would have been $54,735. This equates to a $44,735 profit over 11 years and a compound annual growth rate (CAGR) of 17.58%.

IVV’s CAGR is 3.10 percentage points lower than that of VUG and as a result, would have yielded $12,759 less on a $10,000 investment. Thus, IVV performed worse than VUG by 3.10% annually.


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