The Vanguard Value Index Fund ETF Shares (VTV) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and USMV is a iShares Large Blend fund. So, what’s the difference between VTV and USMV? And which fund is better?
The expense ratio of VTV is 0.11 percentage points lower than USMV’s (0.04% vs. 0.15%). VTV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VTV has provided lower returns than USMV over the past ten years.
In this article, we’ll compare VTV vs. USMV. We’ll look at fund composition and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VTV’s and USMV’s holdings, risk metrics, and industry exposure and examine how these affect their overall returns.
Summary
| VTV | USMV | |
| Name | Vanguard Value Index Fund ETF Shares | iShares MSCI USA Min Vol Factor ETF |
| Category | Large Value | Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 125.77B | 27.6B |
| Avg. Return | 12.07% | 13.89% |
| Div. Yield | 2.15% | 1.5% |
| Expense Ratio | 0.04% | 0.15% |
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 MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
VTV’s dividend yield is 0.65% higher than that of USMV (2.15% vs. 1.5%). Also, VTV yielded on average 1.82% less per year over the past decade (12.07% vs. 13.89%). The expense ratio of VTV is 0.11 percentage points lower than USMV’s (0.04% vs. 0.15%).
Fund Composition
Industry Exposure
| VTV | USMV | |
| Technology | 7.86% | 20.53% |
| Industrials | 12.61% | 10.51% |
| Energy | 5.59% | 0.21% |
| Communication Services | 5.49% | 11.03% |
| Utilities | 5.37% | 6.93% |
| Healthcare | 19.84% | 18.42% |
| Consumer Defensive | 10.72% | 12.82% |
| Real Estate | 3.01% | 2.73% |
| Financial Services | 22.81% | 9.65% |
| Consumer Cyclical | 3.79% | 5.53% |
| Basic Materials | 2.91% | 1.65% |
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 MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.
USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.
VTV is 13.16% more exposed to the Financial Services sector than USMV (22.81% vs 9.65%). VTV’s exposure to Healthcare and Industrials stocks is 1.42% higher and 2.10% higher respectively (19.84% vs. 18.42% and 12.61% vs. 10.51%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 3.02% less of the fund’s holdings compared to USMV (12.17% vs. 15.19%).
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%.
| USMV Holdings | Weight |
| Eli Lilly and Co | 1.64% |
| Microsoft Corp | 1.62% |
| T-Mobile US Inc | 1.51% |
| Accenture PLC Class A | 1.51% |
| Visa Inc Class A | 1.49% |
| Waste Management Inc | 1.45% |
| Adobe Inc | 1.45% |
| The Kroger Co | 1.44% |
| Johnson & Johnson | 1.42% |
| Gilead Sciences Inc | 1.42% |
USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.
Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.
Risk Analysis
| VTV | USMV | |
| 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 Mean Return of 1.05 with a Treynor Ratio of 11.94 and a Beta of 0.98. Its Sharpe Ratio is 0.87 while VTV’s Standard Deviation is 13.78. Furthermore, the fund has a Alpha of -1.92 and a R-squared of 92.61.
The iShares MSCI USA Min Vol Factor ETF (USMV) has a Treynor Ratio of 0 with a Mean Return of 0 and a Alpha of 0. Its R-squared is 0 while USMV’s Standard Deviation is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Beta of 0.
VTV’s Mean Return is 1.05 points higher than that of USMV and its R-squared is 92.61 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than USMV. The Alpha and Beta of VTV are 1.92 points lower and 0.98 points higher than USMV’s Alpha and Beta.
Performance
Annual Returns
| Year | VTV | USMV |
| 2020 | 2.23% | 5.6% |
| 2019 | 25.85% | 27.77% |
| 2018 | -5.39% | 1.36% |
| 2017 | 17.12% | 18.97% |
| 2016 | 16.88% | 10.5% |
| 2015 | -0.89% | 5.5% |
| 2014 | 13.19% | 16.34% |
| 2013 | 33.03% | 25.11% |
| 2012 | 15.19% | 11.04% |
| 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 USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTV | $10,000 | $24,866 | 12.07% |
| USMV | $10,000 | $27,607 | 13.89% |
A $10,000 investment in VTV would have resulted in a final balance of $24,866. This is a profit of $14,866 over 8 years and amounts to a compound annual growth rate (CAGR) of 12.07%.
With a $10,000 investment in USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.
VTV’s CAGR is 1.82 percentage points lower than that of USMV and as a result, would have yielded $2,741 less on a $10,000 investment. Thus, VTV performed worse than USMV by 1.82% annually.
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