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VTI vs. VLUE: What’s The Difference?

The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between VTI and VLUE? And which fund is better?

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

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

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Summary

VTIVLUE
NameVanguard Total Stock Market Index Fund ETF SharesiShares MSCI USA Value Factor ETF
CategoryLarge BlendLarge Value
IssuerVanguardiShares
AUM1.26T15.95B
Avg. Return14.70%8.91%
Div. Yield1.26%1.89%
Expense Ratio0.03%0.15%

The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% 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%.

VTI’s dividend yield is 0.63% lower than that of VLUE (1.26% vs. 1.89%). Also, VTI yielded on average 5.79% more per year over the past decade (14.70% vs. 8.91%). The expense ratio of VTI is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%).

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Fund Composition

Industry Exposure

VTI vs. VLUE - Industry Exposure

VTIVLUE
Technology24.1%26.89%
Industrials9.39%9.14%
Energy2.77%2.42%
Communication Services10.4%10.39%
Utilities2.29%2.68%
Healthcare13.64%14.31%
Consumer Defensive5.77%7.22%
Real Estate3.59%3.19%
Financial Services13.77%10.96%
Consumer Cyclical11.83%10.66%
Basic Materials2.44%2.14%

The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.

VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.

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%.

VTI is 2.79% less exposed to the Technology sector than VLUE (24.1% vs 26.89%). VTI’s exposure to Financial Services and Healthcare stocks is 2.81% higher and 0.67% lower respectively (13.77% vs. 10.96% and 13.64% vs. 14.31%). In total, Basic Materials, Energy, and Real Estate also make up 1.05% more of the fund’s holdings compared to VLUE (8.80% vs. 7.75%).

Holdings

VTI - Holdings

VTI HoldingsWeight
Apple Inc4.9%
Microsoft Corp4.6%
Amazon.com Inc3.33%
Facebook Inc Class A1.88%
Alphabet Inc Class A1.66%
Alphabet Inc Class C1.56%
Tesla Inc1.18%
Berkshire Hathaway Inc Class B1.09%
NVIDIA Corp1.07%
JPMorgan Chase & Co1.06%

VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.

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%.

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Performance

Annual Returns

VTI vs. VLUE - Annual Returns

YearVTIVLUE
202020.95%-0.32%
201930.8%27.47%
2018-5.13%-11.18%
201721.16%21.97%
201612.68%15.68%
20150.4%-3.54%
201412.56%12.29%
201333.51%0.0%
201216.41%0.0%
20111.06%0.0%
201017.26%0.0%

VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% 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

VTI vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTI$10,000$23,15614.70%
VLUE$10,000$17,2478.91%

A $10,000 investment in VTI would have resulted in a final balance of $23,156. This is a profit of $13,156 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.70%.

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%.

VTI’s CAGR is 5.79 percentage points higher than that of VLUE and as a result, would have yielded $5,909 more on a $10,000 investment. Thus, VTI outperformed VLUE by 5.79% annually.


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