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VTI vs. XLV: What’s The Difference?

The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Health Care Select Sector SPDR Fund (XLV) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and XLV is a SPDR State Street Global Advisors Health fund. So, what’s the difference between VTI and XLV? And which fund is better?

The expense ratio of VTI is 0.09 percentage points lower than XLV’s (0.03% vs. 0.12%). VTI also has a higher exposure to the technology sector and a higher standard deviation. Overall, VTI has provided lower returns than XLV over the past ten years.

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

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Summary

VTIXLV
NameVanguard Total Stock Market Index Fund ETF SharesHealth Care Select Sector SPDR Fund
CategoryLarge BlendHealth
IssuerVanguardSPDR State Street Global Advisors
AUM1.26T27.88B
Avg. Return14.70%15.02%
Div. Yield1.26%1.4%
Expense Ratio0.03%0.12%

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 Health Care Select Sector SPDR Fund (XLV) is a Health fund that is issued by SPDR State Street Global Advisors. It currently has 27.88B total assets under management and has yielded an average annual return of 15.02% over the past 10 years. The fund has a dividend yield of 1.4% with an expense ratio of 0.12%.

VTI’s dividend yield is 0.14% lower than that of XLV (1.26% vs. 1.4%). Also, VTI yielded on average 0.33% less per year over the past decade (14.70% vs. 15.02%). The expense ratio of VTI is 0.09 percentage points lower than XLV’s (0.03% vs. 0.12%).

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Fund Composition

Industry Exposure

VTI vs. XLV - Industry Exposure

VTIXLV
Technology24.1%0.0%
Industrials9.39%0.0%
Energy2.77%0.0%
Communication Services10.4%0.0%
Utilities2.29%0.0%
Healthcare13.64%100.0%
Consumer Defensive5.77%0.0%
Real Estate3.59%0.0%
Financial Services13.77%0.0%
Consumer Cyclical11.83%0.0%
Basic Materials2.44%0.0%

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 Health Care Select Sector SPDR Fund (XLV) has the most exposure to the Healthcare sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

XLV’s mid-section with moderate exposure is comprised of Consumer Defensive, Utilities, Communication Services, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

VTI is 24.10% more exposed to the Technology sector than XLV (24.1% vs 0.0%). VTI’s exposure to Financial Services and Healthcare stocks is 13.77% higher and 86.36% lower respectively (13.77% vs. 0.0% and 13.64% vs. 100.0%). In total, Basic Materials, Energy, and Real Estate also make up 8.80% more of the fund’s holdings compared to XLV (8.80% vs. 0.00%).

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%.

XLV - Holdings

XLV HoldingsWeight
Johnson & Johnson9.19%
UnitedHealth Group Inc8.01%
Pfizer Inc4.64%
Abbott Laboratories4.36%
AbbVie Inc4.21%
Thermo Fisher Scientific Inc4.2%
Merck & Co Inc4.17%
Eli Lilly and Co3.87%
Danaher Corp3.61%
Medtronic PLC3.54%

XLV’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and AbbVie Inc at 9.19%, 8.01%, 4.64%, 4.36%, and 4.21%.

Thermo Fisher Scientific Inc (4.2%), Merck & Co Inc (4.17%), and Eli Lilly and Co (3.87%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the XLV’s holdings at 3.61% and 3.54%.

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Performance

Annual Returns

VTI vs. XLV - Annual Returns

YearVTIXLV
202020.95%13.33%
201930.8%20.63%
2018-5.13%6.3%
201721.16%21.7%
201612.68%-2.83%
20150.4%6.82%
201412.56%25.17%
201333.51%41.24%
201216.41%17.56%
20111.06%12.44%
201017.26%2.91%

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 2013 was the strongest year for XLV, returning 41.24% on an annual basis. The poorest year for XLV in the last ten years was 2016, with a yield of -2.83%. Most years the Health Care Select Sector SPDR Fund has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 12.44%, 13.33%, and 17.56% respectively.

Portfolio Growth

VTI vs. XLV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTI$10,000$42,64814.70%
XLV$10,000$44,14715.02%

A $10,000 investment in VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.

With a $10,000 investment in XLV, the end total would have been $44,147. This equates to a $34,147 profit over 11 years and a compound annual growth rate (CAGR) of 15.02%.

VTI’s CAGR is 0.33 percentage points lower than that of XLV and as a result, would have yielded $1,499 less on a $10,000 investment. Thus, VTI performed worse than XLV by 0.33% annually.


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