VTV vs. ITOT: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and ITOT is a iShares Large Blend fund. So, what’s the difference between VTV and ITOT? And which fund is better?

The expense ratio of VTV is 0.01 percentage points higher than ITOT’s (0.04% vs. 0.03%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than ITOT over the past ten years.

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

Summary

VTV ITOT
Name Vanguard Value Index Fund ETF Shares iShares Core S&P Total U.S. Stock Market ETF
Category Large Value Large Blend
Issuer Vanguard iShares
AUM 125.77B 41.97B
Avg. Return 12.07% 14.59%
Div. Yield 2.15% 1.2%
Expense Ratio 0.04% 0.03%

The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.

VTV’s dividend yield is 0.95% higher than that of ITOT (2.15% vs. 1.2%). Also, VTV yielded on average 2.52% less per year over the past decade (12.07% vs. 14.59%). The expense ratio of VTV is 0.01 percentage points higher than ITOT’s (0.04% vs. 0.03%).

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Fund Composition

Industry Exposure

VTV vs. ITOT - Industry Exposure

VTV ITOT
Technology 7.86% 24.49%
Industrials 12.61% 9.21%
Energy 5.59% 2.51%
Communication Services 5.49% 10.54%
Utilities 5.37% 2.35%
Healthcare 19.84% 13.59%
Consumer Defensive 10.72% 5.79%
Real Estate 3.01% 3.67%
Financial Services 22.81% 13.69%
Consumer Cyclical 3.79% 11.69%
Basic Materials 2.91% 2.47%

The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.

VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.

ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.

VTV is 9.12% more exposed to the Financial Services sector than ITOT (22.81% vs 13.69%). VTV’s exposure to Healthcare and Industrials stocks is 6.25% higher and 3.40% higher respectively (19.84% vs. 13.59% and 12.61% vs. 9.21%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 5.54% less of the fund’s holdings compared to ITOT (12.17% vs. 17.71%).

Holdings

VTV - Holdings

VTV Holdings Weight
Berkshire Hathaway Inc Class B 2.98%
JPMorgan Chase & Co 2.82%
Johnson & Johnson 2.6%
UnitedHealth Group Inc 2.27%
Procter & Gamble Co 1.98%
Bank of America Corp 1.91%
Exxon Mobil Corp 1.6%
Comcast Corp Class A 1.57%
Intel Corp 1.36%
Verizon Communications Inc 1.32%

VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.

Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.

ITOT - Holdings

ITOT Holdings Weight
Apple Inc 5.07%
Microsoft Corp 4.75%
Amazon.com Inc 3.16%
Facebook Inc Class A 1.89%
Alphabet Inc Class A 1.79%
Alphabet Inc Class C 1.71%
Tesla Inc 1.17%
Berkshire Hathaway Inc Class B 1.17%
NVIDIA Corp 1.08%
JPMorgan Chase & Co 1.02%

ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.

Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.

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Risk Analysis

VTV ITOT
Mean Return 1.05 1.27
R-squared 92.61 99.4
Std. Deviation 13.78 14.02
Alpha -1.92 -0.54
Beta 0.98 1.03
Sharpe Ratio 0.87 1.04
Treynor Ratio 11.94 14.13

The Vanguard Value Index Fund ETF Shares (VTV) has a R-squared of 92.61 with a Alpha of -1.92 and a Beta of 0.98. Its Mean Return is 1.05 while VTV’s Standard Deviation is 13.78. Furthermore, the fund has a Sharpe Ratio of 0.87 and a Treynor Ratio of 11.94.

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Mean Return of 1.27 with a Standard Deviation of 14.02 and a Treynor Ratio of 14.13. Its Alpha is -0.54 while ITOT’s Sharpe Ratio is 1.04. Furthermore, the fund has a Beta of 1.03 and a R-squared of 99.4.

VTV’s Mean Return is 0.22 points lower than that of ITOT and its R-squared is 6.79 points lower. With a Standard Deviation of 13.78, VTV is slightly less volatile than ITOT. The Alpha and Beta of VTV are 1.38 points lower and 0.05 points lower than ITOT’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. ITOT - Annual Returns

Year VTV ITOT
2020 2.23% 20.75%
2019 25.85% 30.87%
2018 -5.39% -5.27%
2017 17.12% 21.23%
2016 16.88% 12.59%
2015 -0.89% 0.96%
2014 13.19% 13.01%
2013 33.03% 32.67%
2012 15.19% 15.98%
2011 1.16% 1.55%
2010 14.45% 16.15%

VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% respectively.

The year 2013 was the strongest year for ITOT, returning 32.67% on an annual basis. The poorest year for ITOT in the last ten years was 2018, with a yield of -5.27%. Most years the iShares Core S&P Total U.S. Stock Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.01%, 15.98%, and 16.15% respectively.

Portfolio Growth

VTV vs. ITOT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $33,163 12.07%
ITOT $10,000 $42,310 14.59%

A $10,000 investment in VTV would have resulted in a final balance of $33,163. This is a profit of $23,163 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

With a $10,000 investment in ITOT, the end total would have been $42,310. This equates to a $32,310 profit over 11 years and a compound annual growth rate (CAGR) of 14.59%.

VTV’s CAGR is 2.52 percentage points lower than that of ITOT and as a result, would have yielded $9,147 less on a $10,000 investment. Thus, VTV performed worse than ITOT by 2.52% annually.


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