VIG vs. DIA: What’s The Difference?

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VIG and DIA? And which fund is better?

The expense ratio of VIG is 0.10 percentage points lower than DIA’s (0.06% vs. 0.16%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than DIA over the past ten years.

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

Summary

VIG DIA
Name Vanguard Dividend Appreciation Index Fund ETF Shares SPDR Dow Jones Industrial Average ETF Trust
Category Large Blend Large Value
Issuer Vanguard SPDR State Street Global Advisors
AUM 71.92B 30.46B
Avg. Return 13.35% 13.35%
Div. Yield 1.56% 1.61%
Expense Ratio 0.06% 0.16%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

VIG’s dividend yield is 0.05% lower than that of DIA (1.56% vs. 1.61%). Also, VIG yielded on average 0.01% less per year over the past decade (13.35% vs. 13.35%). The expense ratio of VIG is 0.10 percentage points lower than DIA’s (0.06% vs. 0.16%).

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Fund Composition

Industry Exposure

VIG vs. DIA - Industry Exposure

VIG DIA
Technology 14.93% 17.32%
Industrials 17.23% 16.7%
Energy 0.0% 2.0%
Communication Services 2.86% 4.42%
Utilities 2.81% 0.0%
Healthcare 15.52% 17.92%
Consumer Defensive 15.32% 6.3%
Real Estate 0.0% 0.0%
Financial Services 17.18% 20.68%
Consumer Cyclical 10.47% 13.44%
Basic Materials 3.67% 1.21%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.

VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

VIG is 0.53% more exposed to the Industrials sector than DIA (17.23% vs 16.7%). VIG’s exposure to Financial Services and Healthcare stocks is 3.50% lower and 2.40% lower respectively (17.18% vs. 20.68% and 15.52% vs. 17.92%). In total, Energy, Utilities, and Communication Services also make up 0.75% less of the fund’s holdings compared to DIA (5.67% vs. 6.42%).

Holdings

VIG - Holdings

VIG Holdings Weight
Microsoft Corp 4.19%
JPMorgan Chase & Co 3.8%
Johnson & Johnson 3.67%
Walmart Inc 3.38%
Visa Inc Class A 3.22%
UnitedHealth Group Inc 3.22%
The Home Depot Inc 2.91%
Procter & Gamble Co 2.82%
Comcast Corp Class A 2.21%
Coca-Cola Co 1.98%

VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.

UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

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Risk Analysis

VIG DIA
Mean Return 1.09 1.13
R-squared 92.2 93.31
Std. Deviation 12.25 13.68
Alpha 0.12 -0.94
Beta 0.86 0.97
Sharpe Ratio 1.01 0.94
Treynor Ratio 14.33 13.07

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Mean Return of 1.09 with a Standard Deviation of 12.25 and a Sharpe Ratio of 1.01. Its R-squared is 92.2 while VIG’s Alpha is 0.12. Furthermore, the fund has a Beta of 0.86 and a Treynor Ratio of 14.33.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Treynor Ratio of 13.07 with a Sharpe Ratio of 0.94 and a Alpha of -0.94. Its Beta is 0.97 while DIA’s R-squared is 93.31. Furthermore, the fund has a Standard Deviation of 13.68 and a Mean Return of 1.13.

VIG’s Mean Return is 0.04 points lower than that of DIA and its R-squared is 1.11 points lower. With a Standard Deviation of 12.25, VIG is slightly less volatile than DIA. The Alpha and Beta of VIG are 1.06 points higher and 0.11 points lower than DIA’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. DIA - Annual Returns

Year VIG DIA
2020 15.46% 9.63%
2019 29.71% 25.09%
2018 -2.02% -3.6%
2017 22.22% 27.97%
2016 11.84% 16.28%
2015 -1.95% 0.1%
2014 10.06% 9.88%
2013 28.99% 29.41%
2012 11.61% 10.04%
2011 6.21% 8.21%
2010 14.67% 13.87%

VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% respectively.

The year 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.

Portfolio Growth

VIG vs. DIA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $37,951 13.35%
DIA $10,000 $37,965 13.35%

A $10,000 investment in VIG would have resulted in a final balance of $37,951. This is a profit of $27,951 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

With a $10,000 investment in DIA, the end total would have been $37,965. This equates to a $27,965 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.

VIG’s CAGR is 0.01 percentage points lower than that of DIA and as a result, would have yielded $14 less on a $10,000 investment. Thus, VIG performed worse than DIA by 0.01% annually.


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