The Vanguard Information Technology Index Fund ETF Shares (VGT) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and IVE is a iShares Large Value fund. So, what’s the difference between VGT and IVE? And which fund is better?
The expense ratio of VGT is 0.08 percentage points lower than IVE’s (0.1% vs. 0.18%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than IVE over the past ten years.
In this article, we’ll compare VGT vs. IVE. We’ll look at industry exposure and performance, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss VGT’s and IVE’s fund composition, holdings, and portfolio growth and examine how these affect their overall returns.
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Summary
| VGT | IVE | |
| Name | Vanguard Information Technology Index Fund ETF Shares | iShares S&P 500 Value ETF |
| Category | Technology | Large Value |
| Issuer | Vanguard | iShares |
| AUM | 54.13B | 22.4B |
| Avg. Return | 20.84% | 11.68% |
| Div. Yield | 0.66% | 1.88% |
| Expense Ratio | 0.1% | 0.18% |
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 iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
VGT’s dividend yield is 1.22% lower than that of IVE (0.66% vs. 1.88%). Also, VGT yielded on average 9.15% more per year over the past decade (20.84% vs. 11.68%). The expense ratio of VGT is 0.08 percentage points lower than IVE’s (0.1% vs. 0.18%).
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Fund Composition
Industry Exposure
| VGT | IVE | |
| Technology | 88.89% | 9.41% |
| Industrials | 1.67% | 12.19% |
| Energy | 0.0% | 5.43% |
| Communication Services | 0.61% | 6.4% |
| Utilities | 0.0% | 4.82% |
| Healthcare | 0.0% | 15.4% |
| Consumer Defensive | 0.0% | 9.23% |
| Real Estate | 0.0% | 4.38% |
| Financial Services | 8.83% | 22.06% |
| Consumer Cyclical | 0.0% | 7.68% |
| Basic Materials | 0.0% | 2.99% |
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 iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
VGT is 79.48% more exposed to the Technology sector than IVE (88.89% vs 9.41%). VGT’s exposure to Financial Services and Industrials stocks is 13.23% lower and 10.52% lower respectively (8.83% vs. 22.06% and 1.67% vs. 12.19%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 21.29% less of the fund’s holdings compared to IVE (0.00% vs. 21.29%).
Holdings
| VGT Holdings | Weight |
| Apple Inc | 19.58% |
| Microsoft Corp | 16.53% |
| NVIDIA Corp | 4.22% |
| Visa Inc Class A | 3.16% |
| PayPal Holdings Inc | 2.76% |
| Mastercard Inc Class A | 2.76% |
| Adobe Inc | 2.39% |
| Intel Corp | 1.94% |
| Salesforce.com Inc | 1.91% |
| Cisco Systems Inc | 1.9% |
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%.
| IVE Holdings | Weight |
| Berkshire Hathaway Inc Class B | 3.05% |
| JPMorgan Chase & Co | 2.65% |
| The Walt Disney Co | 1.85% |
| Bank of America Corp | 1.67% |
| Johnson & Johnson | 1.57% |
| Exxon Mobil Corp | 1.41% |
| Pfizer Inc | 1.38% |
| Cisco Systems Inc | 1.35% |
| Verizon Communications Inc | 1.33% |
| Intel Corp | 1.25% |
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
Risk Analysis
| VGT | IVE | |
| Mean Return | 1.76 | 1.05 |
| R-squared | 74.84 | 92.08 |
| Std. Deviation | 16.61 | 14.3 |
| Alpha | 10.41 | -2.9 |
| Beta | 1.02 | 1.01 |
| Sharpe Ratio | 1.23 | 0.83 |
| Treynor Ratio | 20.55 | 11.41 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Sharpe Ratio of 1.23 with a Treynor Ratio of 20.55 and a Mean Return of 1.76. Its Beta is 1.02 while VGT’s Alpha is 10.41. Furthermore, the fund has a R-squared of 74.84 and a Standard Deviation of 16.61.
The iShares S&P 500 Value ETF (IVE) has a Mean Return of 1.05 with a Treynor Ratio of 11.41 and a Sharpe Ratio of 0.83. Its R-squared is 92.08 while IVE’s Standard Deviation is 14.3. Furthermore, the fund has a Alpha of -2.9 and a Beta of 1.01.
VGT’s Mean Return is 0.71 points higher than that of IVE and its R-squared is 17.24 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than IVE. The Alpha and Beta of VGT are 13.31 points higher and 0.01 points higher than IVE’s Alpha and Beta.
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Performance
Annual Returns
| Year | VGT | IVE |
| 2020 | 45.94% | 1.24% |
| 2019 | 48.68% | 31.71% |
| 2018 | 2.52% | -9.09% |
| 2017 | 37.07% | 15.19% |
| 2016 | 13.73% | 17.17% |
| 2015 | 5.02% | -3.24% |
| 2014 | 18.01% | 12.14% |
| 2013 | 30.91% | 31.69% |
| 2012 | 14.05% | 17.45% |
| 2011 | 0.52% | -0.63% |
| 2010 | 12.74% | 14.9% |
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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VGT | $10,000 | $72,718 | 20.84% |
| IVE | $10,000 | $31,350 | 11.68% |
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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.
VGT’s CAGR is 9.15 percentage points higher than that of IVE and as a result, would have yielded $41,368 more on a $10,000 investment. Thus, VGT outperformed IVE by 9.15% annually.
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