VOO vs. VIG: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and VIG is a Vanguard Large Blend fund. So, what’s the difference between VOO and VIG? And which fund is better?

The expense ratio of VOO is 0.03 percentage points lower than VIG’s (0.03% vs. 0.06%). VOO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VOO has provided higher returns than VIG over the past ten years.

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

Summary

VOO VIG
Name Vanguard S&P 500 ETF Vanguard Dividend Appreciation Index Fund ETF Shares
Category Large Blend Large Blend
Issuer Vanguard Vanguard
AUM 753.41B 71.92B
Avg. Return 14.45% 13.35%
Div. Yield 1.34% 1.56%
Expense Ratio 0.03% 0.06%

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 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%.

VOO’s dividend yield is 0.22% lower than that of VIG (1.34% vs. 1.56%). Also, VOO yielded on average 1.10% more per year over the past decade (14.45% vs. 13.35%). The expense ratio of VOO is 0.03 percentage points lower than VIG’s (0.03% vs. 0.06%).

Fund Composition

Industry Exposure

VOO vs. VIG - Industry Exposure

VOO VIG
Technology 24.24% 14.93%
Industrials 8.86% 17.23%
Energy 2.84% 0.0%
Communication Services 11.14% 2.86%
Utilities 2.43% 2.81%
Healthcare 13.1% 15.52%
Consumer Defensive 6.32% 15.32%
Real Estate 2.58% 0.0%
Financial Services 14.2% 17.18%
Consumer Cyclical 12.01% 10.47%
Basic Materials 2.27% 3.67%

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 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%.

VOO is 9.31% more exposed to the Technology sector than VIG (24.24% vs 14.93%). VOO’s exposure to Financial Services and Healthcare stocks is 2.98% lower and 2.42% lower respectively (14.2% vs. 17.18% and 13.1% vs. 15.52%). In total, Utilities, Real Estate, and Energy also make up 5.04% more of the fund’s holdings compared to VIG (7.85% vs. 2.81%).

Holdings

VOO - 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%.

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%.

Performance

Annual Returns

VOO vs. VIG - Annual Returns

Year VOO VIG
2020 18.35% 15.46%
2019 31.46% 29.71%
2018 -4.42% -2.02%
2017 21.78% 22.22%
2016 11.93% 11.84%
2015 1.35% -1.95%
2014 13.63% 10.06%
2013 32.33% 28.99%
2012 15.98% 11.61%
2011 2.09% 6.21%
2010 0.0% 14.67%

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 VIG, returning 29.71% on an annual basis. The poorest year for VIG in the last ten years was 2018, with a yield of -2.02%. Most years the Vanguard Dividend Appreciation Index Fund ETF Shares has given investors modest returns, such as in 2012, 2016, and 2010, when gains were 11.61%, 11.84%, and 14.67% respectively.

Portfolio Growth

VOO vs. VIG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
VIG $10,000 $33,096 13.35%

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 VIG, the end total would have been $33,096. This equates to a $23,096 profit over 10 years and a compound annual growth rate (CAGR) of 13.35%.

VOO’s CAGR is 1.10 percentage points higher than that of VIG and as a result, would have yielded $3,479 more on a $10,000 investment. Thus, VOO outperformed VIG by 1.10% annually.


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