VTV vs. VLUE: What’s The Difference?

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

The expense ratio of VTV is 0.11 percentage points lower than VLUE’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 higher returns than VLUE over the past ten years.

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

Summary

VTV VLUE
Name Vanguard Value Index Fund ETF Shares iShares MSCI USA Value Factor ETF
Category Large Value Large Value
Issuer Vanguard iShares
AUM 125.77B 15.95B
Avg. Return 12.07% 8.91%
Div. Yield 2.15% 1.89%
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 Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

VTV’s dividend yield is 0.26% higher than that of VLUE (2.15% vs. 1.89%). Also, VTV yielded on average 3.16% more per year over the past decade (12.07% vs. 8.91%). The expense ratio of VTV is 0.11 percentage points lower than VLUE’s (0.04% vs. 0.15%).

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Fund Composition

Industry Exposure

VTV vs. VLUE - Industry Exposure

VTV VLUE
Technology 7.86% 26.89%
Industrials 12.61% 9.14%
Energy 5.59% 2.42%
Communication Services 5.49% 10.39%
Utilities 5.37% 2.68%
Healthcare 19.84% 14.31%
Consumer Defensive 10.72% 7.22%
Real Estate 3.01% 3.19%
Financial Services 22.81% 10.96%
Consumer Cyclical 3.79% 10.66%
Basic Materials 2.91% 2.14%

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 Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

VTV is 11.85% more exposed to the Financial Services sector than VLUE (22.81% vs 10.96%). VTV’s exposure to Healthcare and Industrials stocks is 5.53% higher and 3.47% higher respectively (19.84% vs. 14.31% and 12.61% vs. 9.14%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 4.36% less of the fund’s holdings compared to VLUE (12.17% vs. 16.53%).

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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

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Risk Analysis

VTV VLUE
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 Standard Deviation of 13.78 with a Sharpe Ratio of 0.87 and a R-squared of 92.61. Its Mean Return is 1.05 while VTV’s Treynor Ratio is 11.94. Furthermore, the fund has a Alpha of -1.92 and a Beta of 0.98.

The iShares MSCI USA Value Factor ETF (VLUE) has a Beta of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Alpha is 0 while VLUE’s Standard Deviation is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Mean Return of 0.

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

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Performance

Annual Returns

VTV vs. VLUE - Annual Returns

Year VTV VLUE
2020 2.23% -0.32%
2019 25.85% 27.47%
2018 -5.39% -11.18%
2017 17.12% 21.97%
2016 16.88% 15.68%
2015 -0.89% -3.54%
2014 13.19% 12.29%
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 VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

VTV vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $18,692 12.07%
VLUE $10,000 $17,247 8.91%

A $10,000 investment in VTV would have resulted in a final balance of $18,692. This is a profit of $8,692 over 7 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

VTV’s CAGR is 3.16 percentage points higher than that of VLUE and as a result, would have yielded $1,445 more on a $10,000 investment. Thus, VTV outperformed VLUE by 3.16% annually.


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