VT vs. IVE: What’s The Difference?

The Vanguard Total World Stock Index Fund ETF Shares (VT) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and IVE is a iShares Large Value fund. So, what’s the difference between VT and IVE? And which fund is better?

The expense ratio of VT is 0.10 percentage points lower than IVE’s (0.08% vs. 0.18%). VT also has a higher exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than IVE over the past 11 years.

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

Summary

VT IVE
Name Vanguard Total World Stock Index Fund ETF Shares iShares S&P 500 Value ETF
Category N/A Large Value
Issuer Vanguard iShares
AUM 30.44B 22.4B
Avg. Return 10.42% 11.68%
Div. Yield 1.65% 1.88%
Expense Ratio 0.08% 0.18%

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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

VT’s dividend yield is 0.23% lower than that of IVE (1.65% vs. 1.88%). Also, VT yielded on average 1.27% less per year over the past decade (10.42% vs. 11.68%). The expense ratio of VT is 0.10 percentage points lower than IVE’s (0.08% vs. 0.18%).

Fund Composition

Industry Exposure

VT vs. IVE - Industry Exposure

VT IVE
Technology 19.63% 9.41%
Industrials 10.7% 12.19%
Energy 3.48% 5.43%
Communication Services 9.02% 6.4%
Utilities 2.6% 4.82%
Healthcare 11.58% 15.4%
Consumer Defensive 6.71% 9.23%
Real Estate 3.64% 4.38%
Financial Services 15.36% 22.06%
Consumer Cyclical 12.32% 7.68%
Basic Materials 4.97% 2.99%

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 S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

VT is 10.22% more exposed to the Technology sector than IVE (19.63% vs 9.41%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 6.70% lower and 4.64% higher respectively (15.36% vs. 22.06% and 12.32% vs. 7.68%). In total, Energy, Real Estate, and Basic Materials also make up 0.71% less of the fund’s holdings compared to IVE (12.09% vs. 12.80%).

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%.

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

Risk Analysis

VT IVE
Mean Return 0.9 1.05
R-squared 99.35 92.08
Std. Deviation 14.19 14.3
Alpha 0.2 -2.9
Beta 1.01 1.01
Sharpe Ratio 0.71 0.83
Treynor Ratio 9.5 11.41

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

The iShares S&P 500 Value ETF (IVE) has a Beta of 1.01 with a Mean Return of 1.05 and a Treynor Ratio of 11.41. Its Alpha is -2.9 while IVE’s R-squared is 92.08. Furthermore, the fund has a Standard Deviation of 14.3 and a Sharpe Ratio of 0.83.

VT’s Mean Return is 0.15 points lower than that of IVE and its R-squared is 7.27 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than IVE. The Alpha and Beta of VT are 3.10 points higher and 0.00 points lower than IVE’s Alpha and Beta.

Performance

Annual Returns

VT vs. IVE - Annual Returns

Year VT IVE
2020 16.74% 1.24%
2019 26.8% 31.71%
2018 -9.67% -9.09%
2017 24.19% 15.19%
2016 8.77% 17.17%
2015 -1.88% -3.24%
2014 3.97% 12.14%
2013 22.98% 31.69%
2012 17.33% 17.45%
2011 -7.71% -0.63%
2010 13.05% 14.9%

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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

VT vs. IVE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VT $10,000 $27,739 10.42%
IVE $10,000 $31,350 11.68%

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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

VT’s CAGR is 1.27 percentage points lower than that of IVE and as a result, would have yielded $3,611 less on a $10,000 investment. Thus, VT performed worse than IVE by 1.27% annually.


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