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VGT vs. VV: What’s The Difference?

The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and VV is a Vanguard Large Blend fund. So, what’s the difference between VGT and VV? And which fund is better?

The expense ratio of VGT is 0.06 percentage points higher than VV’s (0.1% vs. 0.04%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than VV over the past ten years.

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

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Summary

VGTVV
NameVanguard Information Technology Index Fund ETF SharesVanguard Large-Cap Index Fund ETF Shares
CategoryTechnologyLarge Blend
IssuerVanguardVanguard
AUM54.13B37.65B
Avg. Return20.84%14.75%
Div. Yield0.66%1.26%
Expense Ratio0.1%0.04%

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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.

VGT’s dividend yield is 0.60% lower than that of VV (0.66% vs. 1.26%). Also, VGT yielded on average 6.09% more per year over the past decade (20.84% vs. 14.75%). The expense ratio of VGT is 0.06 percentage points higher than VV’s (0.1% vs. 0.04%).

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Fund Composition

Industry Exposure

VGT vs. VV - Industry Exposure

VGTVV
Technology88.89%25.38%
Industrials1.67%8.39%
Energy0.0%2.62%
Communication Services0.61%11.68%
Utilities0.0%2.35%
Healthcare0.0%13.22%
Consumer Defensive0.0%6.06%
Real Estate0.0%2.7%
Financial Services8.83%13.82%
Consumer Cyclical0.0%11.65%
Basic Materials0.0%2.13%

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 Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.

VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.

VGT is 63.51% more exposed to the Technology sector than VV (88.89% vs 25.38%). VGT’s exposure to Financial Services and Industrials stocks is 4.99% lower and 6.72% lower respectively (8.83% vs. 13.82% and 1.67% vs. 8.39%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 20.41% less of the fund’s holdings compared to VV (0.00% vs. 20.41%).

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%.

VV - Holdings

VV HoldingsWeight
Apple Inc5.7%
Microsoft Corp5.35%
Amazon.com Inc3.87%
Facebook Inc Class A2.19%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.81%
Tesla Inc1.37%
Berkshire Hathaway Inc Class B1.3%
NVIDIA Corp1.24%
JPMorgan Chase & Co1.24%

VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.

Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.

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Risk Analysis

VGTVV
Mean Return1.761.24
R-squared74.8499.86
Std. Deviation16.6113.75
Alpha10.41-0.08
Beta1.021.01
Sharpe Ratio1.231.04
Treynor Ratio20.5514.14

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

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Sharpe Ratio of 1.04 with a Beta of 1.01 and a Alpha of -0.08. Its R-squared is 99.86 while VV’s Mean Return is 1.24. Furthermore, the fund has a Standard Deviation of 13.75 and a Treynor Ratio of 14.14.

VGT’s Mean Return is 0.52 points higher than that of VV and its R-squared is 25.02 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than VV. The Alpha and Beta of VGT are 10.49 points higher and 0.01 points higher than VV’s Alpha and Beta.

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Performance

Annual Returns

VGT vs. VV - Annual Returns

YearVGTVV
202045.94%20.99%
201948.68%31.39%
20182.52%-4.44%
201737.07%22.03%
201613.73%11.65%
20155.02%1.07%
201418.01%13.39%
201330.91%32.65%
201214.05%16.09%
20110.52%1.58%
201012.74%15.81%

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 VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% respectively.

Portfolio Growth

VGT vs. VV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VGT$10,000$72,71820.84%
VV$10,000$42,97014.75%

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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.

VGT’s CAGR is 6.09 percentage points higher than that of VV and as a result, would have yielded $29,748 more on a $10,000 investment. Thus, VGT outperformed VV by 6.09% annually.


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