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VO vs. DIA: What’s The Difference?

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

The expense ratio of VO is 0.12 percentage points lower than DIA’s (0.04% vs. 0.16%). VO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VO has provided higher returns than DIA over the past ten years.

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

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Summary

VODIA
NameVanguard Mid-Cap Index Fund ETF SharesSPDR Dow Jones Industrial Average ETF Trust
CategoryMid-Cap BlendLarge Value
IssuerVanguardSPDR State Street Global Advisors
AUM154.08B30.46B
Avg. Return14.34%13.35%
Div. Yield1.23%1.61%
Expense Ratio0.04%0.16%

The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.

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%.

VO’s dividend yield is 0.38% lower than that of DIA (1.23% vs. 1.61%). Also, VO yielded on average 0.98% more per year over the past decade (14.34% vs. 13.35%). The expense ratio of VO is 0.12 percentage points lower than DIA’s (0.04% vs. 0.16%).

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Fund Composition

Industry Exposure

VO vs. DIA - Industry Exposure

VODIA
Technology22.01%17.32%
Industrials11.92%16.7%
Energy3.82%2.0%
Communication Services5.61%4.42%
Utilities5.12%0.0%
Healthcare13.03%17.92%
Consumer Defensive3.25%6.3%
Real Estate8.67%0.0%
Financial Services11.08%20.68%
Consumer Cyclical12.12%13.44%
Basic Materials3.36%1.21%

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.

VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.

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%.

VO is 4.69% more exposed to the Technology sector than DIA (22.01% vs 17.32%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 4.89% lower and 1.32% lower respectively (13.03% vs. 17.92% and 12.12% vs. 13.44%). In total, Basic Materials, Energy, and Utilities also make up 9.09% more of the fund’s holdings compared to DIA (12.30% vs. 3.21%).

Holdings

VO - Holdings

VO HoldingsWeight
IDEXX Laboratories Inc0.78%
DocuSign Inc0.75%
Marvell Technology Inc0.68%
IQVIA Holdings Inc0.68%
Chipotle Mexican Grill Inc0.63%
Veeva Systems Inc Class A0.62%
Digital Realty Trust Inc0.62%
Centene Corp0.62%
Aptiv PLC0.62%
Carrier Global Corp Ordinary Shares0.61%

VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.

Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.

DIA - Holdings

DIA HoldingsWeight
UnitedHealth Group Inc7.63%
Goldman Sachs Group Inc7.23%
The Home Depot Inc6.07%
Microsoft Corp5.16%
Salesforce.com Inc4.65%
Amgen Inc4.64%
Boeing Co4.56%
Visa Inc Class A4.45%
McDonald’s Corp4.4%
Honeywell International Inc4.18%

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

VODIA
Mean Return1.141.13
R-squared92.2293.31
Std. Deviation15.6513.68
Alpha-2.71-0.94
Beta1.110.97
Sharpe Ratio0.830.94
Treynor Ratio11.3213.07

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Treynor Ratio of 11.32 with a R-squared of 92.22 and a Mean Return of 1.14. Its Sharpe Ratio is 0.83 while VO’s Alpha is -2.71. Furthermore, the fund has a Standard Deviation of 15.65 and a Beta of 1.11.

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

VO’s Mean Return is 0.01 points higher than that of DIA and its R-squared is 1.09 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than DIA. The Alpha and Beta of VO are 1.77 points lower and 0.14 points higher than DIA’s Alpha and Beta.

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Performance

Annual Returns

VO vs. DIA - Annual Returns

YearVODIA
202018.22%9.63%
201931.04%25.09%
2018-9.21%-3.6%
201719.25%27.97%
201611.23%16.28%
2015-1.34%0.1%
201413.76%9.88%
201335.15%29.41%
201215.98%10.04%
2011-1.96%8.21%
201025.57%13.87%

VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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

VO vs. DIA - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VO$10,000$40,40414.34%
DIA$10,000$37,96513.35%

A $10,000 investment in VO would have resulted in a final balance of $40,404. This is a profit of $30,404 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.34%.

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%.

VO’s CAGR is 0.98 percentage points higher than that of DIA and as a result, would have yielded $2,439 more on a $10,000 investment. Thus, VO outperformed DIA by 0.98% annually.


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