VUG vs. IVE: What’s The Difference?

The Vanguard Growth Index Fund ETF Shares (VUG) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and IVE is a iShares Large Value fund. So, what’s the difference between VUG and IVE? And which fund is better?

The expense ratio of VUG is 0.14 percentage points lower than IVE’s (0.04% vs. 0.18%). VUG also has a higher exposure to the technology sector and a higher standard deviation. Overall, VUG has provided higher returns than IVE over the past ten years.

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

Summary

VUG IVE
Name Vanguard Growth Index Fund ETF Shares iShares S&P 500 Value ETF
Category Large Growth Large Value
Issuer Vanguard iShares
AUM 165.53B 22.4B
Avg. Return 17.58% 11.68%
Div. Yield 0.57% 1.88%
Expense Ratio 0.04% 0.18%

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 iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

VUG’s dividend yield is 1.31% lower than that of IVE (0.57% vs. 1.88%). Also, VUG yielded on average 5.89% more per year over the past decade (17.58% vs. 11.68%). The expense ratio of VUG is 0.14 percentage points lower than IVE’s (0.04% vs. 0.18%).

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Fund Composition

Industry Exposure

VUG vs. IVE - Industry Exposure

VUG IVE
Technology 39.05% 9.41%
Industrials 5.13% 12.19%
Energy 0.32% 5.43%
Communication Services 16.49% 6.4%
Utilities 0.0% 4.82%
Healthcare 8.09% 15.4%
Consumer Defensive 2.41% 9.23%
Real Estate 2.46% 4.38%
Financial Services 6.75% 22.06%
Consumer Cyclical 17.78% 7.68%
Basic Materials 1.52% 2.99%

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 iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

VUG is 29.64% more exposed to the Technology sector than IVE (39.05% vs 9.41%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 10.10% higher and 10.09% higher respectively (17.78% vs. 7.68% and 16.49% vs. 6.4%). In total, Energy, Basic Materials, and Consumer Defensive also make up 13.40% less of the fund’s holdings compared to IVE (4.25% vs. 17.65%).

Holdings

VUG - Holdings

VUG Holdings Weight
Apple Inc 10.13%
Microsoft Corp 9.52%
Amazon.com Inc 6.88%
Facebook Inc Class A 3.89%
Alphabet Inc Class A 3.43%
Alphabet Inc Class C 3.22%
Tesla Inc 2.44%
NVIDIA Corp 2.21%
Visa Inc Class A 1.78%
PayPal Holdings Inc 1.6%

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%.

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

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Risk Analysis

VUG IVE
Mean Return 1.44 1.05
R-squared 92.48 92.08
Std. Deviation 14.76 14.3
Alpha 1.81 -2.9
Beta 1.04 1.01
Sharpe Ratio 1.13 0.83
Treynor Ratio 16.13 11.41

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

The iShares S&P 500 Value ETF (IVE) has a Standard Deviation of 14.3 with a Alpha of -2.9 and a Beta of 1.01. Its R-squared is 92.08 while IVE’s Treynor Ratio is 11.41. Furthermore, the fund has a Sharpe Ratio of 0.83 and a Mean Return of 1.05.

VUG’s Mean Return is 0.39 points higher than that of IVE and its R-squared is 0.40 points higher. With a Standard Deviation of 14.76, VUG is slightly more volatile than IVE. The Alpha and Beta of VUG are 4.71 points higher and 0.03 points higher than IVE’s Alpha and Beta.

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Performance

Annual Returns

VUG vs. IVE - Annual Returns

Year VUG IVE
2020 40.16% 1.24%
2019 37.26% 31.71%
2018 -3.32% -9.09%
2017 27.8% 15.19%
2016 6.13% 17.17%
2015 3.32% -3.24%
2014 13.62% 12.14%
2013 32.38% 31.69%
2012 17.03% 17.45%
2011 1.87% -0.63%
2010 17.11% 14.9%

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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

VUG vs. IVE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VUG $10,000 $54,735 17.58%
IVE $10,000 $31,350 11.68%

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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

VUG’s CAGR is 5.89 percentage points higher than that of IVE and as a result, would have yielded $23,385 more on a $10,000 investment. Thus, VUG outperformed IVE by 5.89% annually.


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