The Vanguard Total World Stock Index Fund ETF Shares (VT) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and VLUE is a iShares Large Value fund. So, what’s the difference between VT and VLUE? And which fund is better?
The expense ratio of VT is 0.07 percentage points lower than VLUE’s (0.08% vs. 0.15%). VT also has a lower exposure to the technology sector and a higher standard deviation. Overall, VT has provided higher returns than VLUE over the past 7 years.
In this article, we’ll compare VT vs. VLUE. We’ll look at fund composition and industry exposure, as well as at their performance and portfolio growth. Moreover, I’ll also discuss VT’s and VLUE’s risk metrics, holdings, and annual returns and examine how these affect their overall returns.
Summary
| VT | VLUE | |
| NameVanguard Total World Stock Index Fund ETF SharesiShares MSCI USA Value Factor ETF | ||
| Category | N/A | Large Value |
| Issuer | Vanguard | iShares |
| AUM | 30.44B | 15.95B |
| Avg. Return | 10.42% | 8.91% |
| Div. Yield | 1.65% | 1.89% |
| Expense Ratio | 0.08% | 0.15% |
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 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%.
VT’s dividend yield is 0.24% lower than that of VLUE (1.65% vs. 1.89%). Also, VT yielded on average 1.51% more per year over the past decade (10.42% vs. 8.91%). The expense ratio of VT is 0.07 percentage points lower than VLUE’s (0.08% vs. 0.15%).
Fund Composition
Industry Exposure
| VT | VLUE | |
| Technology | 19.63% | 26.89% |
| Industrials | 10.7% | 9.14% |
| Energy | 3.48% | 2.42% |
| Communication Services | 9.02% | 10.39% |
| Utilities | 2.6% | 2.68% |
| Healthcare | 11.58% | 14.31% |
| Consumer Defensive | 6.71% | 7.22% |
| Real Estate | 3.64% | 3.19% |
| Financial Services | 15.36% | 10.96% |
| Consumer Cyclical | 12.32% | 10.66% |
| Basic Materials | 4.97% | 2.14% |
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 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%.
VT is 7.26% less exposed to the Technology sector than VLUE (19.63% vs 26.89%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 4.40% higher and 1.66% higher respectively (15.36% vs. 10.96% and 12.32% vs. 10.66%). In total, Energy, Real Estate, and Basic Materials also make up 4.34% more of the fund’s holdings compared to VLUE (12.09% vs. 7.75%).
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%.
| VLUE Holdings | Weight |
| AT&T Inc | 7.13% |
| Intel Corp | 6.14% |
| General Motors Co | 3.19% |
| Micron Technology Inc | 3.14% |
| Cisco Systems Inc | 3.05% |
| International Business Machines Corp | 2.76% |
| Target Corp | 2.38% |
| Citigroup Inc | 2.32% |
| Ford Motor Co | 2.23% |
| Pfizer Inc | 2.17% |
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%.
Risk Analysis
| VT | VLUE | |
| Mean Return | 0.9 | 0 |
| R-squared | 99.35 | 0 |
| Std. Deviation | 14.19 | 0 |
| Alpha | 0.2 | 0 |
| Beta | 1.01 | 0 |
| Sharpe Ratio | 0.71 | 0 |
| Treynor Ratio | 9.5 | 0 |
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Standard Deviation of 14.19 with a Mean Return of 0.9 and a R-squared of 99.35. Its Sharpe Ratio is 0.71 while VT’s Alpha is 0.2. Furthermore, the fund has a Beta of 1.01 and a Treynor Ratio of 9.5.
The iShares MSCI USA Value Factor ETF (VLUE) has a R-squared of 0 with a Alpha of 0 and a Beta of 0. Its Treynor Ratio is 0 while VLUE’s Mean Return is 0. Furthermore, the fund has a Standard Deviation of 0 and a Sharpe Ratio of 0.
VT’s Mean Return is 0.90 points higher than that of VLUE and its R-squared is 99.35 points higher. With a Standard Deviation of 14.19, VT is slightly more volatile than VLUE. The Alpha and Beta of VT are 0.20 points higher and 1.01 points higher than VLUE’s Alpha and Beta.
Performance
Annual Returns
| Year | VT | VLUE |
| 2020 | 16.74% | -0.32% |
| 2019 | 26.8% | 27.47% |
| 2018 | -9.67% | -11.18% |
| 2017 | 24.19% | 21.97% |
| 2016 | 8.77% | 15.68% |
| 2015 | -1.88% | -3.54% |
| 2014 | 3.97% | 12.29% |
| 2013 | 22.98% | 0.0% |
| 2012 | 17.33% | 0.0% |
| 2011 | -7.71% | 0.0% |
| 2010 | 13.05% | 0.0% |
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 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
| Fund | Initial Balance | Final Balance | CAGR |
| VT | $10,000 | $18,426 | 10.42% |
| VLUE | $10,000 | $17,247 | 8.91% |
A $10,000 investment in VT would have resulted in a final balance of $18,426. This is a profit of $8,426 over 7 years and amounts to a compound annual growth rate (CAGR) of 10.42%.
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%.
VT’s CAGR is 1.51 percentage points higher than that of VLUE and as a result, would have yielded $1,179 more on a $10,000 investment. Thus, VT outperformed VLUE by 1.51% annually.
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