The Vanguard Value Index Fund ETF Shares (VTV) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and IVE is a iShares Large Value fund. So, what’s the difference between VTV and IVE? And which fund is better?
The expense ratio of VTV is 0.14 percentage points lower than IVE’s (0.04% vs. 0.18%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided higher returns than IVE over the past ten years.
In this article, we’ll compare VTV vs. IVE. We’ll look at risk metrics and portfolio growth, as well as at their industry exposure and holdings. Moreover, I’ll also discuss VTV’s and IVE’s performance, fund composition, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||iShares S&P 500 Value ETF|
|Category||Large Value||Large Value|
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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
VTV’s dividend yield is 0.27% higher than that of IVE (2.15% vs. 1.88%). Also, VTV yielded on average 0.39% more per year over the past decade (12.07% vs. 11.68%). The expense ratio of VTV is 0.14 percentage points lower than IVE’s (0.04% vs. 0.18%).
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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 S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
VTV is 0.75% more exposed to the Financial Services sector than IVE (22.81% vs 22.06%). VTV’s exposure to Healthcare and Industrials stocks is 4.44% higher and 0.42% higher respectively (19.84% vs. 15.4% and 12.61% vs. 12.19%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 4.71% less of the fund’s holdings compared to IVE (12.17% vs. 16.88%).
|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%|
|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%.
|Berkshire Hathaway Inc Class B||3.05%|
|JPMorgan Chase & Co||2.65%|
|The Walt Disney Co||1.85%|
|Bank of America Corp||1.67%|
|Johnson & Johnson||1.57%|
|Exxon Mobil Corp||1.41%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
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The Vanguard Value Index Fund ETF Shares (VTV) has a Mean Return of 1.05 with a R-squared of 92.61 and a Standard Deviation of 13.78. Its Sharpe Ratio is 0.87 while VTV’s Alpha is -1.92. Furthermore, the fund has a Beta of 0.98 and a Treynor Ratio of 11.94.
The iShares S&P 500 Value ETF (IVE) has a Mean Return of 1.05 with a Beta of 1.01 and a Alpha of -2.9. Its Standard Deviation is 14.3 while IVE’s Sharpe Ratio is 0.83. Furthermore, the fund has a Treynor Ratio of 11.41 and a R-squared of 92.08.
VTV’s Mean Return is 0.00 points lower than that of IVE and its R-squared is 0.53 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than IVE. The Alpha and Beta of VTV are 0.98 points higher and 0.03 points lower than IVE’s Alpha and Beta.
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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 IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.
VTV’s CAGR is 0.39 percentage points higher than that of IVE and as a result, would have yielded $1,813 more on a $10,000 investment. Thus, VTV outperformed IVE by 0.39% annually.
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