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.
Summary
| VTI | VLUE | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | iShares MSCI USA Value Factor ETF |
| Category | Large Blend | Large Value |
| Issuer | Vanguard | iShares |
| AUM | 1.26T | 15.95B |
| Avg. Return | 14.70% | 8.91% |
| Div. Yield | 1.26% | 1.89% |
| Expense Ratio | 0.03% | 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%).
Fund Composition
Industry Exposure
| VTI | VLUE | |
| Technology | 24.1% | 26.89% |
| Industrials | 9.39% | 9.14% |
| Energy | 2.77% | 2.42% |
| Communication Services | 10.4% | 10.39% |
| Utilities | 2.29% | 2.68% |
| Healthcare | 13.64% | 14.31% |
| Consumer Defensive | 5.77% | 7.22% |
| Real Estate | 3.59% | 3.19% |
| Financial Services | 13.77% | 10.96% |
| Consumer Cyclical | 11.83% | 10.66% |
| Basic Materials | 2.44% | 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 | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
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 | 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%.
Performance
Annual Returns
| Year | VTI | VLUE |
| 2020 | 20.95% | -0.32% |
| 2019 | 30.8% | 27.47% |
| 2018 | -5.13% | -11.18% |
| 2017 | 21.16% | 21.97% |
| 2016 | 12.68% | 15.68% |
| 2015 | 0.4% | -3.54% |
| 2014 | 12.56% | 12.29% |
| 2013 | 33.51% | 0.0% |
| 2012 | 16.41% | 0.0% |
| 2011 | 1.06% | 0.0% |
| 2010 | 17.26% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $23,156 | 14.70% |
| VLUE | $10,000 | $17,247 | 8.91% |
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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