VTV vs. IUSB: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and IUSB is a iShares N/A fund. So, what’s the difference between VTV and IUSB? And which fund is better?

The expense ratio of VTV is 0.02 percentage points lower than IUSB’s (0.04% vs. 0.06%). VTV also has a high exposure to the financial services sector while IUSB is mostly comprised of AAA bonds. Overall, VTV has provided higher returns than IUSB over the past ten years.

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

Summary

VTV IUSB
Name Vanguard Value Index Fund ETF Shares iShares Core Total USD Bond Market ETF
Category Large Value N/A
Issuer Vanguard iShares
AUM 125.77B 14.49B
Avg. Return 12.07% 4.13%
Div. Yield 2.15% 2.1%
Expense Ratio 0.04% 0.06%

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 Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.

VTV’s dividend yield is 0.05% higher than that of IUSB (2.15% vs. 2.1%). Also, VTV yielded on average 7.95% more per year over the past decade (12.07% vs. 4.13%). The expense ratio of VTV is 0.02 percentage points lower than IUSB’s (0.04% vs. 0.06%).

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Fund Composition

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%.

IUSB - Holdings

IUSB Bond Sectors Weight
AAA 58.32%
BBB 16.98%
A 12.27%
BB 4.33%
AA 3.36%
B 2.8%
Others 1.01%
Below B 0.92%
US Government 0.0%

IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.

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Risk Analysis

VTV IUSB
Mean Return 1.05 0
R-squared 92.61 0
Std. Deviation 13.78 0
Alpha -1.92 0
Beta 0.98 0
Sharpe Ratio 0.87 0
Treynor Ratio 11.94 0

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

The iShares Core Total USD Bond Market ETF (IUSB) has a Alpha of 0 with a Standard Deviation of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while IUSB’s Sharpe Ratio is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.

VTV’s Mean Return is 1.05 points higher than that of IUSB and its R-squared is 92.61 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than IUSB. The Alpha and Beta of VTV are 1.92 points lower and 0.98 points higher than IUSB’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. IUSB - Annual Returns

Year VTV IUSB
2020 2.23% 7.59%
2019 25.85% 9.26%
2018 -5.39% -0.38%
2017 17.12% 4.06%
2016 16.88% 3.78%
2015 -0.89% 0.46%
2014 13.19% 0.0%
2013 33.03% 0.0%
2012 15.19% 0.0%
2011 1.16% 0.0%
2010 14.45% 0.0%

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 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.

Portfolio Growth

VTV vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $16,514 12.07%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in VTV would have resulted in a final balance of $16,514. This is a profit of $6,514 over 6 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.

VTV’s CAGR is 7.95 percentage points higher than that of IUSB and as a result, would have yielded $3,810 more on a $10,000 investment. Thus, VTV outperformed IUSB by 7.95% annually.


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