I’ll be comparing the Vanguard S&P 500 ETF (VOO) and the Vanguard Value Index Fund ETF Shares (VTV) in this article.
Both VOO and VTV have made it to the Top 100 ETFs, but what sets them apart?
Which one is better? These are the questions that we’ll answer in this article.
As an investor, it’s important to know the differences between VOO and VTV.
VTV vs VOO: VOO is a Vanguard Large Blend fund that tracks the S&P 500 index, while VTV is a Vanguard Large Value fund that tracks the CRSP US Large Cap Value Index. VOO has a lower expense ratio, higher exposure to the technology sector, and lower standard deviation than VTV. However, VTV has a higher dividend yield and lower price-to-earnings ratio than VOO.
In this article, I’ll provide an in-depth analysis of VOO vs. VTV. We’ll examine their portfolio growth, industry exposure, risk metrics, and performance.
Additionally, we’ll take a closer look at their holdings, annual returns, and fund composition to understand how they impact their overall returns.
By the end of this article, you’ll have a better understanding of VOO and VTV, and which one is a better fit for your investment goals.
Table of Contents
Description of VTV vs VOO ETFs
When it comes to investing in ETFs, Vanguard is a well-known name. VOO and VTV are two of the most popular ETFs offered by Vanguard.
VOO is a Vanguard Large Blend fund, while VTV is a Vanguard Large Value fund.
The primary difference between VOO and VTV is the index they track. VOO tracks the S&P 500 index, which includes the 500 largest publicly traded companies in the US.
On the other hand, VTV tracks the CRSP US Large Cap Value Index, which includes large-cap US stocks that are considered undervalued by the market.
Another significant difference between VOO and VTV is their number of holdings. VOO has 513 companies in the index compared to 352 with VTV.
This difference in the number of holdings affects the diversification of the ETFs.
VOO is more diversified than VTV, but VTV has a higher concentration in value stocks. The expense ratio is another factor to consider when comparing VOO and VTV.
The expense ratio of VOO is 0.01 percentage points lower than VTV’s (0.03% vs. 0.04%). This difference may seem small, but it can add up over time, especially for long-term investors.
In terms of industry exposure, VOO has a higher exposure to the technology sector than VTV.
The technology sector has been one of the best-performing sectors in recent years, and this has contributed to VOO’s outperformance over VTV.
VOO has provided higher returns than VTV over the past ten years.
However, past performance is not a guarantee of future results. It’s important to consider your investment goals and risk tolerance before deciding which ETF to invest in.
VTV vs VOO: Comparison of the Two ETFs
In this section, I will compare the Vanguard S&P 500 ETF (VOO) and the Vanguard Value Index Fund ETF Shares (VTV). I’ll examine their performance, holdings, and other factors that affect their overall returns.
Performance
Over the past ten years, VOO has provided higher returns than VTV.
According to etf.com, VOO has an annualized return of 16.29%, while VTV has an annualized return of 14.54%.
VOO also has a lower standard deviation than VTV, which means that it has been less volatile over time.
Holdings
VOO tracks the S&P 500 index, which is composed of 500 large-cap U.S. stocks. The top five holdings in VOO are Apple, Microsoft, Amazon, Facebook, and Alphabet.
On the other hand, VTV tracks the CRSP US Large Cap Value Index, which is composed of large-cap U.S. value stocks. The top five holdings in VTV are Berkshire Hathaway, Johnson & Johnson, JPMorgan Chase, Procter & Gamble, and UnitedHealth Group.
One of the main differences between VOO and VTV is their exposure to different sectors.
VOO has a higher exposure to the technology sector, while VTV has a higher exposure to the financials and healthcare sectors.
This means that VOO may be more suitable for investors who want exposure to growth stocks, while VTV may be more suitable for investors who want exposure to value stocks.
Other Factors
Another factor to consider when comparing VOO and VTV is their expense ratio. VOO has a lower expense ratio than VTV (0.03% vs. 0.04%). While this may seem like a small difference, it can add up over time and affect your overall returns.
It’s also important to note that VOO and VTV have different fund compositions. VOO is a large blend fund, while VTV is a large value fund.
This means that VOO may be more suitable for investors who want exposure to both growth and value stocks, while VTV may be more suitable for investors who want exposure to value stocks only.
In conclusion, VOO and VTV are both popular ETFs that offer exposure to different sectors and investment styles.
While VOO has provided higher returns than VTV over the past ten years, it’s important to consider other factors such as expense ratio, fund composition, and industry exposure when choosing between the two funds.
Analysis of Similarities and Differences
When comparing VOO and VTV, it’s important to note that both funds are Vanguard ETFs that track large-cap U.S. stocks.
VOO tracks the S&P 500, while VTV tracks the CRSP US Large Cap Value Index. Both funds have a similar expense ratio, with VOO being slightly lower at 0.03% compared to VTV’s 0.04%.
One of the key differences between VOO and VTV is their industry exposure. VOO has a higher exposure to the technology sector, with the sector making up around 27% of its holdings.
On the other hand, VTV has a higher exposure to the financial sector, with the sector making up around 25% of its holdings.
This difference in industry exposure can affect the funds’ performance, as technology stocks tend to have higher growth potential than financial stocks.
Another significant difference between VOO and VTV is their composition.
VOO has a total of 513 holdings, while VTV has 352 holdings. This means that VOO is more diversified than VTV, which could lead to lower volatility and potentially higher returns.
When it comes to performance, VOO has provided higher returns than VTV over the past ten years.
VOO has an annual return of 17.11%, while VTV has an annual return of 15.12%. Additionally, VOO has a lower standard deviation than VTV, which means that it has been less volatile over time.
While VOO and VTV share some similarities, there are significant differences in their industry exposure, composition, and performance.
Investors should carefully consider their investment goals and risk tolerance when deciding which fund to invest in.
Suitability of VTV vs VOO ETFs
Different Types of Investors
When it comes to choosing between VTV and VOO, different types of investors may have different preferences.
For instance, investors who are looking for a more diversified portfolio may prefer VOO, which tracks the S&P 500 index and includes 500 of the largest U.S. companies across various sectors.
On the other hand, investors who are looking for value stocks may prefer VTV, which tracks the CRSP US Large Cap Value Index and includes 352 large-cap value companies in the U.S.
Individual Investment Goals
Investors’ individual investment goals can also play a role in determining which ETF is more suitable for them.
For example, if an investor’s goal is to maximize returns, VOO may be a better option due to its higher returns over the past ten years.
However, if an investor’s goal is to minimize risk, VTV may be a better option due to its lower standard deviation.
Risk Tolerance
Another factor to consider is an investor’s risk tolerance. VOO has a higher exposure to the technology sector, which can be more volatile, while VTV has a higher exposure to financial and industrial sectors, which may be less volatile.
Therefore, investors with a higher risk tolerance may prefer VOO, while investors with a lower risk tolerance may prefer VTV.
The suitability of VTV and VOO ETFs depends on various factors, including investors’ individual investment goals, risk tolerance, and preferences for diversification and value stocks.
Investors should carefully evaluate their investment needs and goals before deciding which ETF is more suitable for them.
Bottom Line: VTV vs VOO
After analyzing VOO and VTV, it’s clear that both funds have their strengths and weaknesses.
VOO has a lower expense ratio, which means investors can save more money on fees. Additionally, VOO has a higher exposure to the technology sector, which has been a major driver of growth in recent years.
On the other hand, VTV has a higher dividend yield and a lower standard deviation, which means it may be a better fit for investors who prioritize income and stability.
For those looking for high growth potential and exposure to the technology sector, VOO may be the better option.
However, for those seeking income and stability, VTV may be the way to go.
It’s important to note that both funds are highly rated and have performed well historically.
Investors can’t go wrong with either option, but they should carefully consider their investment goals before making a decision.
