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VUG vs. DIA: What’s The Difference?

The Vanguard Growth Index Fund ETF Shares (VUG) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VUG and DIA? And which fund is better?

The expense ratio of VUG is 0.12 percentage points lower than DIA’s (0.04% vs. 0.16%). VUG also has a higher exposure to the technology sector and a higher standard deviation. Overall, VUG has provided higher returns than DIA over the past ten years.

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

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Summary

VUGDIA
NameVanguard Growth Index Fund ETF SharesSPDR Dow Jones Industrial Average ETF Trust
CategoryLarge GrowthLarge Value
IssuerVanguardSPDR State Street Global Advisors
AUM165.53B30.46B
Avg. Return17.58%13.35%
Div. Yield0.57%1.61%
Expense Ratio0.04%0.16%

The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

VUG’s dividend yield is 1.04% lower than that of DIA (0.57% vs. 1.61%). Also, VUG yielded on average 4.23% more per year over the past decade (17.58% vs. 13.35%). The expense ratio of VUG is 0.12 percentage points lower than DIA’s (0.04% vs. 0.16%).

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Fund Composition

Industry Exposure

VUG vs. DIA - Industry Exposure

VUGDIA
Technology39.05%17.32%
Industrials5.13%16.7%
Energy0.32%2.0%
Communication Services16.49%4.42%
Utilities0.0%0.0%
Healthcare8.09%17.92%
Consumer Defensive2.41%6.3%
Real Estate2.46%0.0%
Financial Services6.75%20.68%
Consumer Cyclical17.78%13.44%
Basic Materials1.52%1.21%

The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.

VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

VUG is 21.73% more exposed to the Technology sector than DIA (39.05% vs 17.32%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 4.34% higher and 12.07% higher respectively (17.78% vs. 13.44% and 16.49% vs. 4.42%). In total, Energy, Basic Materials, and Consumer Defensive also make up 5.26% less of the fund’s holdings compared to DIA (4.25% vs. 9.51%).

Holdings

VUG - Holdings

VUG HoldingsWeight
Apple Inc10.13%
Microsoft Corp9.52%
Amazon.com Inc6.88%
Facebook Inc Class A3.89%
Alphabet Inc Class A3.43%
Alphabet Inc Class C3.22%
Tesla Inc2.44%
NVIDIA Corp2.21%
Visa Inc Class A1.78%
PayPal Holdings Inc1.6%

VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.

Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.

DIA - Holdings

DIA HoldingsWeight
UnitedHealth Group Inc7.63%
Goldman Sachs Group Inc7.23%
The Home Depot Inc6.07%
Microsoft Corp5.16%
Salesforce.com Inc4.65%
Amgen Inc4.64%
Boeing Co4.56%
Visa Inc Class A4.45%
McDonald’s Corp4.4%
Honeywell International Inc4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

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Risk Analysis

VUGDIA
Mean Return1.441.13
R-squared92.4893.31
Std. Deviation14.7613.68
Alpha1.81-0.94
Beta1.040.97
Sharpe Ratio1.130.94
Treynor Ratio16.1313.07

The Vanguard Growth Index Fund ETF Shares (VUG) has a Alpha of 1.81 with a Mean Return of 1.44 and a R-squared of 92.48. Its Treynor Ratio is 16.13 while VUG’s Beta is 1.04. Furthermore, the fund has a Sharpe Ratio of 1.13 and a Standard Deviation of 14.76.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Mean Return of 1.13 with a Standard Deviation of 13.68 and a R-squared of 93.31. Its Treynor Ratio is 13.07 while DIA’s Sharpe Ratio is 0.94. Furthermore, the fund has a Beta of 0.97 and a Alpha of -0.94.

VUG’s Mean Return is 0.31 points higher than that of DIA and its R-squared is 0.83 points lower. With a Standard Deviation of 14.76, VUG is slightly more volatile than DIA. The Alpha and Beta of VUG are 2.75 points higher and 0.07 points higher than DIA’s Alpha and Beta.

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Performance

Annual Returns

VUG vs. DIA - Annual Returns

YearVUGDIA
202040.16%9.63%
201937.26%25.09%
2018-3.32%-3.6%
201727.8%27.97%
20166.13%16.28%
20153.32%0.1%
201413.62%9.88%
201332.38%29.41%
201217.03%10.04%
20111.87%8.21%
201017.11%13.87%

VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% respectively.

The year 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.

Portfolio Growth

VUG vs. DIA - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VUG$10,000$54,73517.58%
DIA$10,000$37,96513.35%

A $10,000 investment in VUG would have resulted in a final balance of $54,735. This is a profit of $44,735 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.58%.

With a $10,000 investment in DIA, the end total would have been $37,965. This equates to a $27,965 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.

VUG’s CAGR is 4.23 percentage points higher than that of DIA and as a result, would have yielded $16,770 more on a $10,000 investment. Thus, VUG outperformed DIA by 4.23% annually.


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