The Vanguard Small-Cap Index Fund ETF Shares (VB) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VB is a Vanguard Small Blend fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VB and DIA? And which fund is better?
The expense ratio of VB is 0.11 percentage points lower than DIA’s (0.05% vs. 0.16%). VB also has a lower exposure to the technology sector and a higher standard deviation. Overall, VB has provided higher returns than DIA over the past ten years.
In this article, we’ll compare VB vs. DIA. We’ll look at industry exposure and fund composition, as well as at their performance and risk metrics. Moreover, I’ll also discuss VB’s and DIA’s portfolio growth, holdings, and annual returns and examine how these affect their overall returns.
Summary
| VB | DIA | |
| Name | Vanguard Small-Cap Index Fund ETF Shares | SPDR Dow Jones Industrial Average ETF Trust |
| Category | Small Blend | Large Value |
| Issuer | Vanguard | SPDR State Street Global Advisors |
| AUM | 137.72B | 30.46B |
| Avg. Return | 14.25% | 13.35% |
| Div. Yield | 1.14% | 1.61% |
| Expense Ratio | 0.05% | 0.16% |
The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B 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 1.61% with an expense ratio of 0.16%.
VB’s dividend yield is 0.47% lower than that of DIA (1.14% vs. 1.61%). Also, VB yielded on average 0.90% more per year over the past decade (14.25% vs. 13.35%). The expense ratio of VB is 0.11 percentage points lower than DIA’s (0.05% vs. 0.16%).
Fund Composition
Industry Exposure
| VB | DIA | |
| Technology | 16.85% | 17.32% |
| Industrials | 16.11% | 16.7% |
| Energy | 3.67% | 2.0% |
| Communication Services | 2.4% | 4.42% |
| Utilities | 2.19% | 0.0% |
| Healthcare | 14.34% | 17.92% |
| Consumer Defensive | 4.14% | 6.3% |
| Real Estate | 9.56% | 0.0% |
| Financial Services | 13.06% | 20.68% |
| Consumer Cyclical | 13.03% | 13.44% |
| Basic Materials | 4.63% | 1.21% |
The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.
VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.
DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.
VB is 0.47% less exposed to the Technology sector than DIA (16.85% vs 17.32%). VB’s exposure to Industrials and Healthcare stocks is 0.59% lower and 3.58% lower respectively (16.11% vs. 16.7% and 14.34% vs. 17.92%). In total, Communication Services, Energy, and Consumer Defensive also make up 2.51% less of the fund’s holdings compared to DIA (10.21% vs. 12.72%).
Holdings
| VB Holdings | Weight |
| Charles River Laboratories International Inc | 0.34% |
| Pool Corp | 0.32% |
| Bio-Techne Corp | 0.32% |
| Avantor Inc | 0.32% |
| PerkinElmer Inc | 0.31% |
| Diamondback Energy Inc | 0.31% |
| VICI Properties Inc Ordinary Shares | 0.3% |
| IDEX Corp | 0.3% |
| Entegris Inc | 0.3% |
| Novavax Inc | 0.29% |
VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.
Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.
| DIA Holdings | Weight |
| UnitedHealth Group Inc | 7.63% |
| Goldman Sachs Group Inc | 7.23% |
| The Home Depot Inc | 6.07% |
| Microsoft Corp | 5.16% |
| Salesforce.com Inc | 4.65% |
| Amgen Inc | 4.64% |
| Boeing Co | 4.56% |
| Visa Inc Class A | 4.45% |
| McDonald’s Corp | 4.4% |
| Honeywell International Inc | 4.18% |
DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.
Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.
Risk Analysis
| VB | DIA | |
| Mean Return | 1.15 | 1.13 |
| R-squared | 85.03 | 93.31 |
| Std. Deviation | 17.82 | 13.68 |
| Alpha | -4.02 | -0.94 |
| Beta | 1.21 | 0.97 |
| Sharpe Ratio | 0.74 | 0.94 |
| Treynor Ratio | 10.15 | 13.07 |
The Vanguard Small-Cap Index Fund ETF Shares (VB) has a R-squared of 85.03 with a Standard Deviation of 17.82 and a Mean Return of 1.15. Its Treynor Ratio is 10.15 while VB’s Alpha is -4.02. Furthermore, the fund has a Sharpe Ratio of 0.74 and a Beta of 1.21.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Beta of 0.97 with a Treynor Ratio of 13.07 and a Mean Return of 1.13. Its R-squared is 93.31 while DIA’s Sharpe Ratio is 0.94. Furthermore, the fund has a Alpha of -0.94 and a Standard Deviation of 13.68.
VB’s Mean Return is 0.02 points higher than that of DIA and its R-squared is 8.28 points lower. With a Standard Deviation of 17.82, VB is slightly more volatile than DIA. The Alpha and Beta of VB are 3.08 points lower and 0.24 points higher than DIA’s Alpha and Beta.
Performance
Annual Returns
| Year | VB | DIA |
| 2020 | 19.08% | 9.63% |
| 2019 | 27.37% | 25.09% |
| 2018 | -9.3% | -3.6% |
| 2017 | 16.24% | 27.97% |
| 2016 | 18.31% | 16.28% |
| 2015 | -3.65% | 0.1% |
| 2014 | 7.51% | 9.88% |
| 2013 | 37.8% | 29.41% |
| 2012 | 18.22% | 10.04% |
| 2011 | -2.68% | 8.21% |
| 2010 | 27.89% | 13.87% |
VB had its best year in 2013 with an annual return of 37.8%. VB’s worst year over the past decade yielded -9.3% and occurred in 2018. In most years the Vanguard Small-Cap Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2016 where annual returns amounted to 16.24%, 18.22%, and 18.31% respectively.
The year 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VB | $10,000 | $39,734 | 14.25% |
| DIA | $10,000 | $37,965 | 13.35% |
A $10,000 investment in VB would have resulted in a final balance of $39,734. This is a profit of $29,734 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.25%.
With a $10,000 investment in DIA, the end total would have been $37,965. This equates to a $27,965 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.
VB’s CAGR is 0.90 percentage points higher than that of DIA and as a result, would have yielded $1,769 more on a $10,000 investment. Thus, VB outperformed DIA by 0.90% annually.
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