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VOO vs. VLUE: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between VOO and VLUE? And which fund is better?

The expense ratio of VOO is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%). VOO also has a lower exposure to the technology sector and a higher standard deviation. Overall, VOO has provided higher returns than VLUE over the past ten years.

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

Summary

VOOVLUE
NameVanguard S&P 500 ETFiShares MSCI USA Value Factor ETF
CategoryLarge BlendLarge Value
IssuerVanguardiShares
AUM753.41B15.95B
Avg. Return14.45%8.91%
Div. Yield1.34%1.89%
Expense Ratio0.03%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 Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

VOO’s dividend yield is 0.55% lower than that of VLUE (1.34% vs. 1.89%). Also, VOO yielded on average 5.54% more per year over the past decade (14.45% vs. 8.91%). The expense ratio of VOO is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%).

Fund Composition

Industry Exposure

VOO vs. VLUE - Industry Exposure

VOOVLUE
Technology24.24%26.89%
Industrials8.86%9.14%
Energy2.84%2.42%
Communication Services11.14%10.39%
Utilities2.43%2.68%
Healthcare13.1%14.31%
Consumer Defensive6.32%7.22%
Real Estate2.58%3.19%
Financial Services14.2%10.96%
Consumer Cyclical12.01%10.66%
Basic Materials2.27%2.14%

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 Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

VOO is 2.65% less exposed to the Technology sector than VLUE (24.24% vs 26.89%). VOO’s exposure to Financial Services and Healthcare stocks is 3.24% higher and 1.21% lower respectively (14.2% vs. 10.96% and 13.1% vs. 14.31%). In total, Utilities, Real Estate, and Energy also make up 0.44% less of the fund’s holdings compared to VLUE (7.85% vs. 8.29%).

Holdings

VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

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%.

VLUE - Holdings

VLUE HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

Performance

Annual Returns

VOO vs. VLUE - Annual Returns

YearVOOVLUE
202018.35%-0.32%
201931.46%27.47%
2018-4.42%-11.18%
201721.78%21.97%
201611.93%15.68%
20151.35%-3.54%
201413.63%12.29%
201332.33%0.0%
201215.98%0.0%
20112.09%0.0%
20100.0%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 VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

VOO vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$23,34314.45%
VLUE$10,000$17,2478.91%

A $10,000 investment in VOO would have resulted in a final balance of $23,343. This is a profit of $13,343 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

VOO’s CAGR is 5.54 percentage points higher than that of VLUE and as a result, would have yielded $6,096 more on a $10,000 investment. Thus, VOO outperformed VLUE by 5.54% annually.


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