VT vs. EFV: What’s The Difference?

The Vanguard Total World Stock Index Fund ETF Shares (VT) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between VT and EFV? And which fund is better?

The expense ratio of VT is 0.31 percentage points lower than EFV’s (0.08% vs. 0.39%). VT also has a higher exposure to the technology sector and a lower standard deviation. Overall, VT has provided higher returns than EFV over the past 11 years.

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

Summary

VT EFV
Name Vanguard Total World Stock Index Fund ETF Shares iShares MSCI EAFE Value ETF
Category N/A Foreign Large Value
Issuer Vanguard iShares
AUM 30.44B 14.37B
Avg. Return 10.42% 3.99%
Div. Yield 1.65% 2.94%
Expense Ratio 0.08% 0.39%

The Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.

The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

VT’s dividend yield is 1.29% lower than that of EFV (1.65% vs. 2.94%). Also, VT yielded on average 6.42% more per year over the past decade (10.42% vs. 3.99%). The expense ratio of VT is 0.31 percentage points lower than EFV’s (0.08% vs. 0.39%).

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Fund Composition

Industry Exposure

VT vs. EFV - Industry Exposure

VT EFV
Technology 19.63% 2.98%
Industrials 10.7% 11.6%
Energy 3.48% 6.6%
Communication Services 9.02% 6.46%
Utilities 2.6% 6.14%
Healthcare 11.58% 9.19%
Consumer Defensive 6.71% 6.82%
Real Estate 3.64% 5.06%
Financial Services 15.36% 26.55%
Consumer Cyclical 12.32% 9.0%
Basic Materials 4.97% 9.59%

The Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.

VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.

The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

VT is 16.65% more exposed to the Technology sector than EFV (19.63% vs 2.98%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 11.19% lower and 3.32% higher respectively (15.36% vs. 26.55% and 12.32% vs. 9.0%). In total, Energy, Real Estate, and Basic Materials also make up 9.16% less of the fund’s holdings compared to EFV (12.09% vs. 21.25%).

Holdings

VT - Holdings

VT Holdings Weight
Apple Inc 2.85%
Microsoft Corp 2.71%
Amazon.com Inc 1.98%
Facebook Inc Class A 1.1%
Alphabet Inc Class A 0.97%
Alphabet Inc Class C 0.95%
Tesla Inc 0.7%
NVIDIA Corp 0.64%
JPMorgan Chase & Co 0.62%
Tencent Holdings Ltd 0.6%

VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.

Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

VT EFV
Mean Return 0.9 0.42
R-squared 99.35 92.15
Std. Deviation 14.19 16.53
Alpha 0.2 -1.77
Beta 1.01 1.05
Sharpe Ratio 0.71 0.26
Treynor Ratio 9.5 2.92

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Beta of 1.01 with a Standard Deviation of 14.19 and a Alpha of 0.2. Its Mean Return is 0.9 while VT’s R-squared is 99.35. Furthermore, the fund has a Treynor Ratio of 9.5 and a Sharpe Ratio of 0.71.

The iShares MSCI EAFE Value ETF (EFV) has a Sharpe Ratio of 0.26 with a Mean Return of 0.42 and a Beta of 1.05. Its R-squared is 92.15 while EFV’s Alpha is -1.77. Furthermore, the fund has a Treynor Ratio of 2.92 and a Standard Deviation of 16.53.

VT’s Mean Return is 0.48 points higher than that of EFV and its R-squared is 7.20 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than EFV. The Alpha and Beta of VT are 1.97 points higher and 0.04 points lower than EFV’s Alpha and Beta.

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Performance

Annual Returns

VT vs. EFV - Annual Returns

Year VT EFV
2020 16.74% -2.78%
2019 26.8% 15.97%
2018 -9.67% -14.88%
2017 24.19% 21.22%
2016 8.77% 4.87%
2015 -1.88% -5.89%
2014 3.97% -5.65%
2013 22.98% 22.61%
2012 17.33% 17.52%
2011 -7.71% -12.24%
2010 13.05% 3.18%

VT had its best year in 2019 with an annual return of 26.8%. VT’s worst year over the past decade yielded -9.67% and occurred in 2018. In most years the Vanguard Total World Stock Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 8.77%, 13.05%, and 16.74% respectively.

The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

VT vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VT $10,000 $27,739 10.42%
EFV $10,000 $14,134 3.99%

A $10,000 investment in VT would have resulted in a final balance of $27,739. This is a profit of $17,739 over 11 years and amounts to a compound annual growth rate (CAGR) of 10.42%.

With a $10,000 investment in EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

VT’s CAGR is 6.42 percentage points higher than that of EFV and as a result, would have yielded $13,605 more on a $10,000 investment. Thus, VT outperformed EFV by 6.42% annually.


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