The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and VT is a Vanguard N/A fund. So, what’s the difference between VGT and VT? And which fund is better?
The expense ratio of VGT is 0.02 percentage points higher than VT’s (0.1% vs. 0.08%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than VT over the past ten years.
In this article, we’ll compare VGT vs. VT. We’ll look at portfolio growth and annual returns, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss VGT’s and VT’s holdings, performance, and industry exposure and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
Summary
| VGT | VT | |
| Name | Vanguard Information Technology Index Fund ETF Shares | Vanguard Total World Stock Index Fund ETF Shares |
| Category | Technology | N/A |
| Issuer | Vanguard | Vanguard |
| AUM | 54.13B | 30.44B |
| Avg. Return | 20.84% | 10.42% |
| Div. Yield | 0.66% | 1.65% |
| Expense Ratio | 0.1% | 0.08% |
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 Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
VGT’s dividend yield is 0.99% lower than that of VT (0.66% vs. 1.65%). Also, VGT yielded on average 10.42% more per year over the past decade (20.84% vs. 10.42%). The expense ratio of VGT is 0.02 percentage points higher than VT’s (0.1% vs. 0.08%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
Fund Composition
Industry Exposure
| VGT | VT | |
| Technology | 88.89% | 19.63% |
| Industrials | 1.67% | 10.7% |
| Energy | 0.0% | 3.48% |
| Communication Services | 0.61% | 9.02% |
| Utilities | 0.0% | 2.6% |
| Healthcare | 0.0% | 11.58% |
| Consumer Defensive | 0.0% | 6.71% |
| Real Estate | 0.0% | 3.64% |
| Financial Services | 8.83% | 15.36% |
| Consumer Cyclical | 0.0% | 12.32% |
| Basic Materials | 0.0% | 4.97% |
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 Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
VGT is 69.26% more exposed to the Technology sector than VT (88.89% vs 19.63%). VGT’s exposure to Financial Services and Industrials stocks is 6.53% lower and 9.03% lower respectively (8.83% vs. 15.36% and 1.67% vs. 10.7%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 22.67% less of the fund’s holdings compared to VT (0.00% vs. 22.67%).
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%.
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
Risk Analysis
| VGT | VT | |
| Mean Return | 1.76 | 0.9 |
| R-squared | 74.84 | 99.35 |
| Std. Deviation | 16.61 | 14.19 |
| Alpha | 10.41 | 0.2 |
| Beta | 1.02 | 1.01 |
| Sharpe Ratio | 1.23 | 0.71 |
| Treynor Ratio | 20.55 | 9.5 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a R-squared of 74.84 with a Alpha of 10.41 and a Beta of 1.02. Its Treynor Ratio is 20.55 while VGT’s Mean Return is 1.76. Furthermore, the fund has a Standard Deviation of 16.61 and a Sharpe Ratio of 1.23.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Beta of 1.01 with a R-squared of 99.35 and a Mean Return of 0.9. Its Alpha is 0.2 while VT’s Sharpe Ratio is 0.71. Furthermore, the fund has a Standard Deviation of 14.19 and a Treynor Ratio of 9.5.
VGT’s Mean Return is 0.86 points higher than that of VT and its R-squared is 24.51 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than VT. The Alpha and Beta of VGT are 10.21 points higher and 0.01 points higher than VT’s Alpha and Beta.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
Performance
Annual Returns
| Year | VGT | VT |
| 2020 | 45.94% | 16.74% |
| 2019 | 48.68% | 26.8% |
| 2018 | 2.52% | -9.67% |
| 2017 | 37.07% | 24.19% |
| 2016 | 13.73% | 8.77% |
| 2015 | 5.02% | -1.88% |
| 2014 | 18.01% | 3.97% |
| 2013 | 30.91% | 22.98% |
| 2012 | 14.05% | 17.33% |
| 2011 | 0.52% | -7.71% |
| 2010 | 12.74% | 13.05% |
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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VGT | $10,000 | $72,718 | 20.84% |
| VT | $10,000 | $27,739 | 10.42% |
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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
VGT’s CAGR is 10.42 percentage points higher than that of VT and as a result, would have yielded $44,979 more on a $10,000 investment. Thus, VGT outperformed VT by 10.42% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
