The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VT is a Vanguard N/A fund. So, what’s the difference between VTV and VT? And which fund is better?
The expense ratio of VTV is 0.04 percentage points lower than VT’s (0.04% vs. 0.08%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided higher returns than VT over the past ten years.
In this article, we’ll compare VTV vs. VT. We’ll look at fund composition and portfolio growth, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss VTV’s and VT’s holdings, performance, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Vanguard Total World Stock Index Fund ETF Shares|
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
VTV’s dividend yield is 0.50% higher than that of VT (2.15% vs. 1.65%). Also, VTV yielded on average 1.66% more per year over the past decade (12.07% vs. 10.42%). The expense ratio of VTV is 0.04 percentage points lower than VT’s (0.04% vs. 0.08%).
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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 Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
VTV is 7.45% more exposed to the Financial Services sector than VT (22.81% vs 15.36%). VTV’s exposure to Healthcare and Industrials stocks is 8.26% higher and 1.91% higher respectively (19.84% vs. 11.58% and 12.61% vs. 10.7%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 6.39% less of the fund’s holdings compared to VT (12.17% vs. 18.56%).
|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%.
|Facebook Inc Class A||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
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The Vanguard Value Index Fund ETF Shares (VTV) has a Standard Deviation of 13.78 with a R-squared of 92.61 and a Treynor Ratio of 11.94. Its Alpha is -1.92 while VTV’s Mean Return is 1.05. Furthermore, the fund has a Sharpe Ratio of 0.87 and a Beta of 0.98.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Beta of 1.01 with a Mean Return of 0.9 and a R-squared of 99.35. Its Sharpe Ratio is 0.71 while VT’s Alpha is 0.2. Furthermore, the fund has a Treynor Ratio of 9.5 and a Standard Deviation of 14.19.
VTV’s Mean Return is 0.15 points higher than that of VT and its R-squared is 6.74 points lower. With a Standard Deviation of 13.78, VTV is slightly less volatile than VT. The Alpha and Beta of VTV are 2.12 points lower and 0.03 points lower than VT’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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% 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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
VTV’s CAGR is 1.66 percentage points higher than that of VT and as a result, would have yielded $5,424 more on a $10,000 investment. Thus, VTV outperformed VT by 1.66% annually.
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