VEU vs. DIA: What’s The Difference?

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VEU 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 VEU and DIA? And which fund is better?

The expense ratio of VEU is 0.08 percentage points lower than DIA’s (0.08% vs. 0.16%). VEU also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VEU has provided lower returns than DIA over the past ten years.

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

Summary

VEU DIA
Name Vanguard FTSE All-World ex-US Index Fund ETF Shares SPDR Dow Jones Industrial Average ETF Trust
Category Foreign Large Blend Large Value
Issuer Vanguard SPDR State Street Global Advisors
AUM 53.64B 30.46B
Avg. Return 6.64% 13.35%
Div. Yield 2.31% 1.61%
Expense Ratio 0.08% 0.16%

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 0.08%.

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%.

VEU’s dividend yield is 0.70% higher than that of DIA (2.31% vs. 1.61%). Also, VEU yielded on average 6.71% less per year over the past decade (6.64% vs. 13.35%). The expense ratio of VEU is 0.08 percentage points lower than DIA’s (0.08% vs. 0.16%).

Fund Composition

Industry Exposure

VEU vs. DIA - Industry Exposure

VEU DIA
Technology 12.94% 17.32%
Industrials 12.19% 16.7%
Energy 4.69% 2.0%
Communication Services 7.44% 4.42%
Utilities 2.89% 0.0%
Healthcare 9.34% 17.92%
Consumer Defensive 8.28% 6.3%
Real Estate 3.04% 0.0%
Financial Services 18.46% 20.68%
Consumer Cyclical 12.57% 13.44%
Basic Materials 8.17% 1.21%

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has the most exposure to the Financial Services sector at 18.46%. This is followed by Technology and Consumer Cyclical at 12.94% and 12.57% respectively. Real Estate (3.04%), Energy (4.69%), and Communication Services (7.44%) only make up 15.17% of the fund’s total assets.

VEU’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Industrials, and Consumer Cyclical stocks at 8.17%, 8.28%, 9.34%, 12.19%, and 12.57%.

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%.

VEU is 2.22% less exposed to the Financial Services sector than DIA (18.46% vs 20.68%). VEU’s exposure to Technology and Consumer Cyclical stocks is 4.38% lower and 0.87% lower respectively (12.94% vs. 17.32% and 12.57% vs. 13.44%). In total, Real Estate, Energy, and Communication Services also make up 8.75% more of the fund’s holdings compared to DIA (15.17% vs. 6.42%).

Holdings

VEU - Holdings

VEU Holdings Weight
Tencent Holdings Ltd 1.57%
Alibaba Group Holding Ltd Ordinary Shares 1.4%
Nestle SA 1.22%
Taiwan Semiconductor Manufacturing Co Ltd 0.98%
ASML Holding NV 0.95%
Taiwan Semiconductor Manufacturing Co Ltd ADR 0.91%
Roche Holding AG 0.91%
Toyota Motor Corp 0.75%
LVMH Moet Hennessy Louis Vuitton SE 0.68%
Novartis AG 0.67%

VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.

Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.

DIA - Holdings

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

VEU DIA
Mean Return 0.56 1.13
R-squared 98.44 93.31
Std. Deviation 15.08 13.68
Alpha 0.28 -0.94
Beta 0.99 0.97
Sharpe Ratio 0.4 0.94
Treynor Ratio 5.12 13.07

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a Standard Deviation of 15.08 with a Alpha of 0.28 and a Treynor Ratio of 5.12. Its Beta is 0.99 while VEU’s R-squared is 98.44. Furthermore, the fund has a Mean Return of 0.56 and a Sharpe Ratio of 0.4.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Treynor Ratio of 13.07 with a Sharpe Ratio of 0.94 and a R-squared of 93.31. Its Alpha is -0.94 while DIA’s Standard Deviation is 13.68. Furthermore, the fund has a Beta of 0.97 and a Mean Return of 1.13.

VEU’s Mean Return is 0.57 points lower than that of DIA and its R-squared is 5.13 points higher. With a Standard Deviation of 15.08, VEU is slightly more volatile than DIA. The Alpha and Beta of VEU are 1.22 points higher and 0.02 points higher than DIA’s Alpha and Beta.

Performance

Annual Returns

VEU vs. DIA - Annual Returns

Year VEU DIA
2020 11.39% 9.63%
2019 21.63% 25.09%
2018 -13.97% -3.6%
2017 27.27% 27.97%
2016 4.77% 16.28%
2015 -4.67% 0.1%
2014 -4.05% 9.88%
2013 14.5% 29.41%
2012 18.55% 10.04%
2011 -14.25% 8.21%
2010 11.85% 13.87%

VEU had its best year in 2017 with an annual return of 27.27%. VEU’s worst year over the past decade yielded -14.25% and occurred in 2011. In most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares provided moderate returns such as in 2016, 2020, and 2010 where annual returns amounted to 4.77%, 11.39%, and 11.85% 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

VEU vs. DIA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VEU $10,000 $18,507 6.64%
DIA $10,000 $37,965 13.35%

A $10,000 investment in VEU would have resulted in a final balance of $18,507. This is a profit of $8,507 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.64%.

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%.

VEU’s CAGR is 6.71 percentage points lower than that of DIA and as a result, would have yielded $19,458 less on a $10,000 investment. Thus, VEU performed worse than DIA by 6.71% annually.


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