Skip to content

VTV vs. VGT: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Information Technology Index Fund ETF Shares (VGT) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VGT is a Vanguard Technology fund. So, what’s the difference between VTV and VGT? And which fund is better?

The expense ratio of VTV is 0.06 percentage points lower than VGT’s (0.04% vs. 0.1%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than VGT over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VTVVGT
NameVanguard Value Index Fund ETF SharesVanguard Information Technology Index Fund ETF Shares
CategoryLarge ValueTechnology
IssuerVanguardVanguard
AUM125.77B54.13B
Avg. Return12.07%20.84%
Div. Yield2.15%0.66%
Expense Ratio0.04%0.1%

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 Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.

VTV’s dividend yield is 1.49% higher than that of VGT (2.15% vs. 0.66%). Also, VTV yielded on average 8.76% less per year over the past decade (12.07% vs. 20.84%). The expense ratio of VTV is 0.06 percentage points lower than VGT’s (0.04% vs. 0.1%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

VTV vs. VGT - Industry Exposure

VTVVGT
Technology7.86%88.89%
Industrials12.61%1.67%
Energy5.59%0.0%
Communication Services5.49%0.61%
Utilities5.37%0.0%
Healthcare19.84%0.0%
Consumer Defensive10.72%0.0%
Real Estate3.01%0.0%
Financial Services22.81%8.83%
Consumer Cyclical3.79%0.0%
Basic Materials2.91%0.0%

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 Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.

VTV is 13.98% more exposed to the Financial Services sector than VGT (22.81% vs 8.83%). VTV’s exposure to Healthcare and Industrials stocks is 19.84% higher and 10.94% higher respectively (19.84% vs. 0.0% and 12.61% vs. 1.67%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 12.17% more of the fund’s holdings compared to VGT (12.17% vs. 0.00%).

Holdings

VTV - Holdings

VTV HoldingsWeight
Berkshire Hathaway Inc Class B2.98%
JPMorgan Chase & Co2.82%
Johnson & Johnson2.6%
UnitedHealth Group Inc2.27%
Procter & Gamble Co1.98%
Bank of America Corp1.91%
Exxon Mobil Corp1.6%
Comcast Corp Class A1.57%
Intel Corp1.36%
Verizon Communications Inc1.32%

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%.

VGT - Holdings

VGT HoldingsWeight
Apple Inc19.58%
Microsoft Corp16.53%
NVIDIA Corp4.22%
Visa Inc Class A3.16%
PayPal Holdings Inc2.76%
Mastercard Inc Class A2.76%
Adobe Inc2.39%
Intel Corp1.94%
Salesforce.com Inc1.91%
Cisco Systems Inc1.9%

VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.

Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

VTVVGT
Mean Return1.051.76
R-squared92.6174.84
Std. Deviation13.7816.61
Alpha-1.9210.41
Beta0.981.02
Sharpe Ratio0.871.23
Treynor Ratio11.9420.55

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

The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Standard Deviation of 16.61 with a Alpha of 10.41 and a Sharpe Ratio of 1.23. Its Beta is 1.02 while VGT’s Mean Return is 1.76. Furthermore, the fund has a Treynor Ratio of 20.55 and a R-squared of 74.84.

VTV’s Mean Return is 0.71 points lower than that of VGT and its R-squared is 17.77 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than VGT. The Alpha and Beta of VTV are 12.33 points lower and 0.04 points lower than VGT’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

VTV vs. VGT - Annual Returns

YearVTVVGT
20202.23%45.94%
201925.85%48.68%
2018-5.39%2.52%
201717.12%37.07%
201616.88%13.73%
2015-0.89%5.02%
201413.19%18.01%
201333.03%30.91%
201215.19%14.05%
20111.16%0.52%
201014.45%12.74%

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 VGT, returning 48.68% on an annual basis. The poorest year for VGT in the last ten years was 2011, with a yield of 0.52%. Most years the Vanguard Information Technology Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2014, when gains were 13.73%, 14.05%, and 18.01% respectively.

Portfolio Growth

VTV vs. VGT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTV$10,000$33,16312.07%
VGT$10,000$72,71820.84%

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 VGT, the end total would have been $72,718. This equates to a $62,718 profit over 11 years and a compound annual growth rate (CAGR) of 20.84%.

VTV’s CAGR is 8.76 percentage points lower than that of VGT and as a result, would have yielded $39,555 less on a $10,000 investment. Thus, VTV performed worse than VGT by 8.76% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.