The Vanguard S&P 500 ETF (VOO) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and USMV is a iShares Large Blend fund. So, what’s the difference between VOO and USMV? And which fund is better?
The expense ratio of VOO is 0.12 percentage points lower than USMV’s (0.03% vs. 0.15%). VOO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VOO has provided higher returns than USMV over the past ten years.
In this article, we’ll compare VOO vs. USMV. We’ll look at fund composition and performance, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss VOO’s and USMV’s annual returns, holdings, and portfolio growth and examine how these affect their overall returns.
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Summary
| VOO | USMV | |
| Name | Vanguard S&P 500 ETF | iShares MSCI USA Min Vol Factor ETF |
| Category | Large Blend | Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 753.41B | 27.6B |
| Avg. Return | 14.45% | 13.89% |
| Div. Yield | 1.34% | 1.5% |
| Expense Ratio | 0.03% | 0.15% |
The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.
The iShares MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
VOO’s dividend yield is 0.16% lower than that of USMV (1.34% vs. 1.5%). Also, VOO yielded on average 0.55% more per year over the past decade (14.45% vs. 13.89%). The expense ratio of VOO is 0.12 percentage points lower than USMV’s (0.03% vs. 0.15%).
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Fund Composition
Industry Exposure
| VOO | USMV | |
| Technology | 24.24% | 20.53% |
| Industrials | 8.86% | 10.51% |
| Energy | 2.84% | 0.21% |
| Communication Services | 11.14% | 11.03% |
| Utilities | 2.43% | 6.93% |
| Healthcare | 13.1% | 18.42% |
| Consumer Defensive | 6.32% | 12.82% |
| Real Estate | 2.58% | 2.73% |
| Financial Services | 14.2% | 9.65% |
| Consumer Cyclical | 12.01% | 5.53% |
| Basic Materials | 2.27% | 1.65% |
The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.
VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.
The iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.
USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.
VOO is 3.71% more exposed to the Technology sector than USMV (24.24% vs 20.53%). VOO’s exposure to Financial Services and Healthcare stocks is 4.55% higher and 5.32% lower respectively (14.2% vs. 9.65% and 13.1% vs. 18.42%). In total, Utilities, Real Estate, and Energy also make up 2.02% less of the fund’s holdings compared to USMV (7.85% vs. 9.87%).
Holdings
| VOO Holdings | Weight |
| Apple Inc | 5.92% |
| Microsoft Corp | 5.62% |
| Amazon.com Inc | 4.06% |
| Facebook Inc Class A | 2.29% |
| Alphabet Inc Class A | 2.02% |
| Alphabet Inc Class C | 1.97% |
| Tesla Inc | 1.44% |
| Berkshire Hathaway Inc Class B | 1.44% |
| NVIDIA Corp | 1.37% |
| JPMorgan Chase & Co | 1.3% |
VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.
Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.
| USMV Holdings | Weight |
| Eli Lilly and Co | 1.64% |
| Microsoft Corp | 1.62% |
| T-Mobile US Inc | 1.51% |
| Accenture PLC Class A | 1.51% |
| Visa Inc Class A | 1.49% |
| Waste Management Inc | 1.45% |
| Adobe Inc | 1.45% |
| The Kroger Co | 1.44% |
| Johnson & Johnson | 1.42% |
| Gilead Sciences Inc | 1.42% |
USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.
Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.
Performance
Annual Returns
| Year | VOO | USMV |
| 2020 | 18.35% | 5.6% |
| 2019 | 31.46% | 27.77% |
| 2018 | -4.42% | 1.36% |
| 2017 | 21.78% | 18.97% |
| 2016 | 11.93% | 10.5% |
| 2015 | 1.35% | 5.5% |
| 2014 | 13.63% | 16.34% |
| 2013 | 32.33% | 25.11% |
| 2012 | 15.98% | 11.04% |
| 2011 | 2.09% | 0.0% |
| 2010 | 0.0% | 0.0% |
VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.
The year 2019 was the strongest year for USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VOO | $10,000 | $30,890 | 14.45% |
| USMV | $10,000 | $27,607 | 13.89% |
A $10,000 investment in VOO would have resulted in a final balance of $30,890. This is a profit of $20,890 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.45%.
With a $10,000 investment in USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.
VOO’s CAGR is 0.55 percentage points higher than that of USMV and as a result, would have yielded $3,283 more on a $10,000 investment. Thus, VOO outperformed USMV by 0.55% annually.
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