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
| VGT | VV | |
| Name | Vanguard Information Technology Index Fund ETF Shares | Vanguard Large-Cap Index Fund ETF Shares |
| Category | Technology | Large Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 54.13B | 37.65B |
| Avg. Return | 20.84% | 14.75% |
| Div. Yield | 0.66% | 1.26% |
| Expense Ratio | 0.1% | 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 | VV | |
| Technology | 88.89% | 25.38% |
| Industrials | 1.67% | 8.39% |
| Energy | 0.0% | 2.62% |
| Communication Services | 0.61% | 11.68% |
| Utilities | 0.0% | 2.35% |
| Healthcare | 0.0% | 13.22% |
| Consumer Defensive | 0.0% | 6.06% |
| Real Estate | 0.0% | 2.7% |
| Financial Services | 8.83% | 13.82% |
| Consumer Cyclical | 0.0% | 11.65% |
| Basic Materials | 0.0% | 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 | 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%.
| VV Holdings | Weight |
| Apple Inc | 5.7% |
| Microsoft Corp | 5.35% |
| Amazon.com Inc | 3.87% |
| Facebook Inc Class A | 2.19% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.81% |
| Tesla Inc | 1.37% |
| Berkshire Hathaway Inc Class B | 1.3% |
| NVIDIA Corp | 1.24% |
| JPMorgan Chase & Co | 1.24% |
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%.
Risk Analysis
| VGT | VV | |
| Mean Return | 1.76 | 1.24 |
| R-squared | 74.84 | 99.86 |
| Std. Deviation | 16.61 | 13.75 |
| Alpha | 10.41 | -0.08 |
| Beta | 1.02 | 1.01 |
| Sharpe Ratio | 1.23 | 1.04 |
| Treynor Ratio | 20.55 | 14.14 |
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
| Year | VGT | VV |
| 2020 | 45.94% | 20.99% |
| 2019 | 48.68% | 31.39% |
| 2018 | 2.52% | -4.44% |
| 2017 | 37.07% | 22.03% |
| 2016 | 13.73% | 11.65% |
| 2015 | 5.02% | 1.07% |
| 2014 | 18.01% | 13.39% |
| 2013 | 30.91% | 32.65% |
| 2012 | 14.05% | 16.09% |
| 2011 | 0.52% | 1.58% |
| 2010 | 12.74% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| VGT | $10,000 | $72,718 | 20.84% |
| VV | $10,000 | $42,970 | 14.75% |
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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