The Vanguard S&P 500 ETF (VOO) and the Vanguard Information Technology Index Fund ETF Shares (VGT) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and VGT is a Vanguard Technology fund. So, what’s the difference between VOO and VGT? And which fund is better?
The expense ratio of VOO is 0.07 percentage points lower than VGT’s (0.03% vs. 0.1%). VOO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VOO has provided lower returns than VGT over the past ten years.
In this article, we’ll compare VOO vs. VGT. We’ll look at holdings and annual returns, as well as at their fund composition and performance. Moreover, I’ll also discuss VOO’s and VGT’s risk metrics, industry exposure, and portfolio growth and examine how these affect their overall returns.
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Summary
| VOO | VGT | |
| Name | Vanguard S&P 500 ETF | Vanguard Information Technology Index Fund ETF Shares |
| Category | Large Blend | Technology |
| Issuer | Vanguard | Vanguard |
| AUM | 753.41B | 54.13B |
| Avg. Return | 14.45% | 20.84% |
| Div. Yield | 1.34% | 0.66% |
| Expense Ratio | 0.03% | 0.1% |
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 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%.
VOO’s dividend yield is 0.68% higher than that of VGT (1.34% vs. 0.66%). Also, VOO yielded on average 6.39% less per year over the past decade (14.45% vs. 20.84%). The expense ratio of VOO is 0.07 percentage points lower than VGT’s (0.03% vs. 0.1%).
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Fund Composition
Industry Exposure
| VOO | VGT | |
| Technology | 24.24% | 88.89% |
| Industrials | 8.86% | 1.67% |
| Energy | 2.84% | 0.0% |
| Communication Services | 11.14% | 0.61% |
| Utilities | 2.43% | 0.0% |
| Healthcare | 13.1% | 0.0% |
| Consumer Defensive | 6.32% | 0.0% |
| Real Estate | 2.58% | 0.0% |
| Financial Services | 14.2% | 8.83% |
| Consumer Cyclical | 12.01% | 0.0% |
| Basic Materials | 2.27% | 0.0% |
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 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%.
VOO is 64.65% less exposed to the Technology sector than VGT (24.24% vs 88.89%). VOO’s exposure to Financial Services and Healthcare stocks is 5.37% higher and 13.10% higher respectively (14.2% vs. 8.83% and 13.1% vs. 0.0%). In total, Utilities, Real Estate, and Energy also make up 7.85% more of the fund’s holdings compared to VGT (7.85% vs. 0.00%).
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%.
| 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%.
Performance
Annual Returns
| Year | VOO | VGT |
| 2020 | 18.35% | 45.94% |
| 2019 | 31.46% | 48.68% |
| 2018 | -4.42% | 2.52% |
| 2017 | 21.78% | 37.07% |
| 2016 | 11.93% | 13.73% |
| 2015 | 1.35% | 5.02% |
| 2014 | 13.63% | 18.01% |
| 2013 | 32.33% | 30.91% |
| 2012 | 15.98% | 14.05% |
| 2011 | 2.09% | 0.52% |
| 2010 | 0.0% | 12.74% |
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 VGT, returning 48.68% on an annual basis. The poorest year for VGT in the last ten years was 2011, with a yield of 0.52%. Most years the Vanguard Information Technology Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2014, when gains were 13.73%, 14.05%, and 18.01% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VOO | $10,000 | $36,575 | 14.45% |
| VGT | $10,000 | $64,500 | 20.84% |
A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.
With a $10,000 investment in VGT, the end total would have been $64,500. This equates to a $54,500 profit over 10 years and a compound annual growth rate (CAGR) of 20.84%.
VOO’s CAGR is 6.39 percentage points lower than that of VGT and as a result, would have yielded $27,925 less on a $10,000 investment. Thus, VOO performed worse than VGT by 6.39% annually.
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