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VGT vs. DIA: What’s The Difference?

The Vanguard Information Technology Index Fund ETF Shares (VGT) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VGT and DIA? And which fund is better?

The expense ratio of VGT is 0.06 percentage points lower than DIA’s (0.1% vs. 0.16%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than DIA over the past ten years.

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

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Summary

VGTDIA
NameVanguard Information Technology Index Fund ETF SharesSPDR Dow Jones Industrial Average ETF Trust
CategoryTechnologyLarge Value
IssuerVanguardSPDR State Street Global Advisors
AUM54.13B30.46B
Avg. Return20.84%13.35%
Div. Yield0.66%1.61%
Expense Ratio0.1%0.16%

The Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.

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%.

VGT’s dividend yield is 0.95% lower than that of DIA (0.66% vs. 1.61%). Also, VGT yielded on average 7.48% more per year over the past decade (20.84% vs. 13.35%). The expense ratio of VGT is 0.06 percentage points lower than DIA’s (0.1% vs. 0.16%).

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Fund Composition

Industry Exposure

VGT vs. DIA - Industry Exposure

VGTDIA
Technology88.89%17.32%
Industrials1.67%16.7%
Energy0.0%2.0%
Communication Services0.61%4.42%
Utilities0.0%0.0%
Healthcare0.0%17.92%
Consumer Defensive0.0%6.3%
Real Estate0.0%0.0%
Financial Services8.83%20.68%
Consumer Cyclical0.0%13.44%
Basic Materials0.0%1.21%

The Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.

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%.

VGT is 71.57% more exposed to the Technology sector than DIA (88.89% vs 17.32%). VGT’s exposure to Financial Services and Industrials stocks is 11.85% lower and 15.03% lower respectively (8.83% vs. 20.68% and 1.67% vs. 16.7%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 19.74% less of the fund’s holdings compared to DIA (0.00% vs. 19.74%).

Holdings

VGT - Holdings

VGT HoldingsWeight
Apple Inc19.58%
Microsoft Corp16.53%
NVIDIA Corp4.22%
Visa Inc Class A3.16%
PayPal Holdings Inc2.76%
Mastercard Inc Class A2.76%
Adobe Inc2.39%
Intel Corp1.94%
Salesforce.com Inc1.91%
Cisco Systems Inc1.9%

VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.

Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.

DIA - Holdings

DIA HoldingsWeight
UnitedHealth Group Inc7.63%
Goldman Sachs Group Inc7.23%
The Home Depot Inc6.07%
Microsoft Corp5.16%
Salesforce.com Inc4.65%
Amgen Inc4.64%
Boeing Co4.56%
Visa Inc Class A4.45%
McDonald’s Corp4.4%
Honeywell International Inc4.18%

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%.

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Risk Analysis

VGTDIA
Mean Return1.761.13
R-squared74.8493.31
Std. Deviation16.6113.68
Alpha10.41-0.94
Beta1.020.97
Sharpe Ratio1.230.94
Treynor Ratio20.5513.07

The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Sharpe Ratio of 1.23 with a Alpha of 10.41 and a R-squared of 74.84. Its Treynor Ratio is 20.55 while VGT’s Mean Return is 1.76. Furthermore, the fund has a Beta of 1.02 and a Standard Deviation of 16.61.

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

VGT’s Mean Return is 0.63 points higher than that of DIA and its R-squared is 18.47 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than DIA. The Alpha and Beta of VGT are 11.35 points higher and 0.05 points higher than DIA’s Alpha and Beta.

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Performance

Annual Returns

VGT vs. DIA - Annual Returns

YearVGTDIA
202045.94%9.63%
201948.68%25.09%
20182.52%-3.6%
201737.07%27.97%
201613.73%16.28%
20155.02%0.1%
201418.01%9.88%
201330.91%29.41%
201214.05%10.04%
20110.52%8.21%
201012.74%13.87%

VGT had its best year in 2019 with an annual return of 48.68%. VGT’s worst year over the past decade yielded 0.52% and occurred in 2011. In most years the Vanguard Information Technology Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 13.73%, 14.05%, and 18.01% 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

VGT vs. DIA - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VGT$10,000$72,71820.84%
DIA$10,000$37,96513.35%

A $10,000 investment in VGT would have resulted in a final balance of $72,718. This is a profit of $62,718 over 11 years and amounts to a compound annual growth rate (CAGR) of 20.84%.

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%.

VGT’s CAGR is 7.48 percentage points higher than that of DIA and as a result, would have yielded $34,753 more on a $10,000 investment. Thus, VGT outperformed DIA by 7.48% annually.


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