VGT vs. VT: What’s The Difference?

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.

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%).

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Fund Composition

Industry Exposure

VGT vs. VT - 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

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

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%.

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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.

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Performance

Annual Returns

VGT vs. VT - 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

VGT vs. VT - 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.


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