The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VEA is a Vanguard Foreign Large Blend fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VEA and DIA? And which fund is better?
The expense ratio of VEA is 0.11 percentage points lower than DIA’s (0.05% vs. 0.16%). VEA also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VEA has provided lower returns than DIA over the past ten years.
In this article, we’ll compare VEA vs. DIA. We’ll look at portfolio growth and industry exposure, as well as at their risk metrics and performance. Moreover, I’ll also discuss VEA’s and DIA’s annual returns, holdings, and fund composition and examine how these affect their overall returns.
|Name||Vanguard FTSE Developed Markets Index Fund ETF Shares||SPDR Dow Jones Industrial Average ETF Trust|
|Category||Foreign Large Blend||Large Value|
|Issuer||Vanguard||SPDR State Street Global Advisors|
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%.
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%.
VEA’s dividend yield is 0.88% higher than that of DIA (2.49% vs. 1.61%). Also, VEA yielded on average 6.30% less per year over the past decade (7.05% vs. 13.35%). The expense ratio of VEA is 0.11 percentage points lower than DIA’s (0.05% vs. 0.16%).
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%.
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%.
VEA is 3.29% less exposed to the Financial Services sector than DIA (17.39% vs 20.68%). VEA’s exposure to Industrials and Technology stocks is 1.23% lower and 5.65% lower respectively (15.47% vs. 16.7% and 11.67% vs. 17.32%). In total, Real Estate, Energy, and Communication Services also make up 7.20% more of the fund’s holdings compared to DIA (13.62% vs. 6.42%).
|Samsung Electronics Co Ltd||1.4%|
|ASML Holding NV||1.16%|
|Roche Holding AG||1.1%|
|Toyota Motor Corp||0.92%|
|LVMH Moet Hennessy Louis Vuitton SE||0.84%|
|Shopify Inc A||0.7%|
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%.
|UnitedHealth Group Inc||7.63%|
|Goldman Sachs Group Inc||7.23%|
|The Home Depot Inc||6.07%|
|Visa Inc Class A||4.45%|
|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%.
VEA had its best year in 2017 with an annual return of 26.44%. VEA’s worst year over the past decade yielded -14.47% and occurred in 2018. In most years the Vanguard FTSE Developed Markets Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.51%, 8.47%, and 10.29% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VEA would have resulted in a final balance of $19,290. This is a profit of $9,290 over 11 years and amounts to a compound annual growth rate (CAGR) of 7.05%.
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%.
VEA’s CAGR is 6.30 percentage points lower than that of DIA and as a result, would have yielded $18,675 less on a $10,000 investment. Thus, VEA performed worse than DIA by 6.30% annually.
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