The iShares MSCI EAFE Value ETF (EFV) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. EFV is a iShares Foreign Large Value fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between EFV and VOE? And which fund is better?
The expense ratio of EFV is 0.32 percentage points higher than VOE’s (0.39% vs. 0.07%). EFV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, EFV has provided lower returns than VOE over the past 11 years.
In this article, we’ll compare EFV vs. VOE. We’ll look at performance and risk metrics, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss EFV’s and VOE’s holdings, fund composition, and annual returns and examine how these affect their overall returns.
Summary
| EFV | VOE | |
| Name | iShares MSCI EAFE Value ETF | Vanguard Mid-Cap Value Index Fund ETF Shares |
| Category | Foreign Large Value | Mid-Cap Value |
| Issuer | iShares | Vanguard |
| AUM | 14.37B | 26.78B |
| Avg. Return | 3.99% | 12.52% |
| Div. Yield | 2.94% | 1.87% |
| Expense Ratio | 0.39% | 0.07% |
The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
EFV’s dividend yield is 1.07% higher than that of VOE (2.94% vs. 1.87%). Also, EFV yielded on average 8.53% less per year over the past decade (3.99% vs. 12.52%). The expense ratio of EFV is 0.32 percentage points higher than VOE’s (0.39% vs. 0.07%).
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Fund Composition
Industry Exposure
| EFV | VOE | |
| Technology | 2.98% | 9.85% |
| Industrials | 11.6% | 9.4% |
| Energy | 6.6% | 5.69% |
| Communication Services | 6.46% | 5.27% |
| Utilities | 6.14% | 10.93% |
| Healthcare | 9.19% | 7.04% |
| Consumer Defensive | 6.82% | 4.85% |
| Real Estate | 5.06% | 11.48% |
| Financial Services | 26.55% | 18.26% |
| Consumer Cyclical | 9.0% | 11.8% |
| Basic Materials | 9.59% | 5.44% |
The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
EFV is 8.29% more exposed to the Financial Services sector than VOE (26.55% vs 18.26%). EFV’s exposure to Industrials and Basic Materials stocks is 2.20% higher and 4.15% higher respectively (11.6% vs. 9.4% and 9.59% vs. 5.44%). In total, Real Estate, Utilities, and Communication Services also make up 10.02% less of the fund’s holdings compared to VOE (17.66% vs. 27.68%).
Holdings
| EFV Holdings | Weight |
| Novartis AG | 2.41% |
| Toyota Motor Corp | 2.21% |
| Commonwealth Bank of Australia | 1.59% |
| Siemens AG | 1.45% |
| Sanofi SA | 1.42% |
| HSBC Holdings PLC | 1.4% |
| TotalEnergies SE | 1.35% |
| Allianz SE | 1.23% |
| GlaxoSmithKline PLC | 1.18% |
| Rio Tinto PLC | 1.1% |
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
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Risk Analysis
| EFV | VOE | |
| Mean Return | 0.42 | 1.05 |
| R-squared | 92.15 | 88.76 |
| Std. Deviation | 16.53 | 15.98 |
| Alpha | -1.77 | -3.77 |
| Beta | 1.05 | 1.11 |
| Sharpe Ratio | 0.26 | 0.75 |
| Treynor Ratio | 2.92 | 10.19 |
The iShares MSCI EAFE Value ETF (EFV) has a Alpha of -1.77 with a Mean Return of 0.42 and a Treynor Ratio of 2.92. Its Sharpe Ratio is 0.26 while EFV’s R-squared is 92.15. Furthermore, the fund has a Standard Deviation of 16.53 and a Beta of 1.05.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Mean Return of 1.05 with a R-squared of 88.76 and a Sharpe Ratio of 0.75. Its Alpha is -3.77 while VOE’s Treynor Ratio is 10.19. Furthermore, the fund has a Beta of 1.11 and a Standard Deviation of 15.98.
EFV’s Mean Return is 0.63 points lower than that of VOE and its R-squared is 3.39 points higher. With a Standard Deviation of 16.53, EFV is slightly more volatile than VOE. The Alpha and Beta of EFV are 2.00 points higher and 0.06 points lower than VOE’s Alpha and Beta.
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Performance
Annual Returns
| Year | EFV | VOE |
| 2020 | -2.78% | 2.5% |
| 2019 | 15.97% | 27.98% |
| 2018 | -14.88% | -12.41% |
| 2017 | 21.22% | 17.05% |
| 2016 | 4.87% | 15.26% |
| 2015 | -5.89% | -1.8% |
| 2014 | -5.65% | 13.98% |
| 2013 | 22.61% | 37.65% |
| 2012 | 17.52% | 16.04% |
| 2011 | -12.24% | -0.32% |
| 2010 | 3.18% | 21.83% |
EFV had its best year in 2013 with an annual return of 22.61%. EFV’s worst year over the past decade yielded -14.88% and occurred in 2018. In most years the iShares MSCI EAFE Value ETF provided moderate returns such as in 2020, 2010, and 2016 where annual returns amounted to -2.78%, 3.18%, and 4.87% respectively.
The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| EFV | $10,000 | $14,134 | 3.99% |
| VOE | $10,000 | $33,655 | 12.52% |
A $10,000 investment in EFV would have resulted in a final balance of $14,134. This is a profit of $4,134 over 11 years and amounts to a compound annual growth rate (CAGR) of 3.99%.
With a $10,000 investment in VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
EFV’s CAGR is 8.53 percentage points lower than that of VOE and as a result, would have yielded $19,521 less on a $10,000 investment. Thus, EFV performed worse than VOE by 8.53% annually.
Current recommendations:
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