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VB vs. VOE: What’s The Difference?

The Vanguard Small-Cap Index Fund ETF Shares (VB) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. VB is a Vanguard Small Blend fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between VB and VOE? And which fund is better?

The expense ratio of VB is 0.02 percentage points lower than VOE’s (0.05% vs. 0.07%). VB also has a higher exposure to the technology sector and a higher standard deviation. Overall, VB has provided higher returns than VOE over the past ten years.

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

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Summary

VBVOE
NameVanguard Small-Cap Index Fund ETF SharesVanguard Mid-Cap Value Index Fund ETF Shares
CategorySmall BlendMid-Cap Value
IssuerVanguardVanguard
AUM137.72B26.78B
Avg. Return14.25%12.52%
Div. Yield1.14%1.87%
Expense Ratio0.05%0.07%

The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.

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%.

VB’s dividend yield is 0.73% lower than that of VOE (1.14% vs. 1.87%). Also, VB yielded on average 1.73% more per year over the past decade (14.25% vs. 12.52%). The expense ratio of VB is 0.02 percentage points lower than VOE’s (0.05% vs. 0.07%).

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Fund Composition

Industry Exposure

VB vs. VOE - Industry Exposure

VBVOE
Technology16.85%9.85%
Industrials16.11%9.4%
Energy3.67%5.69%
Communication Services2.4%5.27%
Utilities2.19%10.93%
Healthcare14.34%7.04%
Consumer Defensive4.14%4.85%
Real Estate9.56%11.48%
Financial Services13.06%18.26%
Consumer Cyclical13.03%11.8%
Basic Materials4.63%5.44%

The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.

VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.

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%.

VB is 7.00% more exposed to the Technology sector than VOE (16.85% vs 9.85%). VB’s exposure to Industrials and Healthcare stocks is 6.71% higher and 7.30% higher respectively (16.11% vs. 9.4% and 14.34% vs. 7.04%). In total, Communication Services, Energy, and Consumer Defensive also make up 5.60% less of the fund’s holdings compared to VOE (10.21% vs. 15.81%).

Holdings

VB - Holdings

VB HoldingsWeight
Charles River Laboratories International Inc0.34%
Pool Corp0.32%
Bio-Techne Corp0.32%
Avantor Inc0.32%
PerkinElmer Inc0.31%
Diamondback Energy Inc0.31%
VICI Properties Inc Ordinary Shares0.3%
IDEX Corp0.3%
Entegris Inc0.3%
Novavax Inc0.29%

VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.

Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.

VOE - Holdings

VOE HoldingsWeight
Carrier Global Corp Ordinary Shares1.28%
International Flavors & Fragrances Inc1.13%
Motorola Solutions Inc1.12%
Discover Financial Services1.09%
Welltower Inc1.05%
Corteva Inc0.99%
Valero Energy Corp0.97%
Corning Inc0.95%
Willis Towers Watson PLC0.9%
D.R. Horton Inc0.89%

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

VBVOE
Mean Return1.151.05
R-squared85.0388.76
Std. Deviation17.8215.98
Alpha-4.02-3.77
Beta1.211.11
Sharpe Ratio0.740.75
Treynor Ratio10.1510.19

The Vanguard Small-Cap Index Fund ETF Shares (VB) has a R-squared of 85.03 with a Sharpe Ratio of 0.74 and a Alpha of -4.02. Its Standard Deviation is 17.82 while VB’s Beta is 1.21. Furthermore, the fund has a Mean Return of 1.15 and a Treynor Ratio of 10.15.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Treynor Ratio of 10.19 with a Alpha of -3.77 and a Standard Deviation of 15.98. Its Beta is 1.11 while VOE’s Mean Return is 1.05. Furthermore, the fund has a R-squared of 88.76 and a Sharpe Ratio of 0.75.

VB’s Mean Return is 0.10 points higher than that of VOE and its R-squared is 3.73 points lower. With a Standard Deviation of 17.82, VB is slightly more volatile than VOE. The Alpha and Beta of VB are 0.25 points lower and 0.10 points higher than VOE’s Alpha and Beta.

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Performance

Annual Returns

VB vs. VOE - Annual Returns

YearVBVOE
202019.08%2.5%
201927.37%27.98%
2018-9.3%-12.41%
201716.24%17.05%
201618.31%15.26%
2015-3.65%-1.8%
20147.51%13.98%
201337.8%37.65%
201218.22%16.04%
2011-2.68%-0.32%
201027.89%21.83%

VB had its best year in 2013 with an annual return of 37.8%. VB’s worst year over the past decade yielded -9.3% and occurred in 2018. In most years the Vanguard Small-Cap Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2016 where annual returns amounted to 16.24%, 18.22%, and 18.31% 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

VB vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VB$10,000$39,73414.25%
VOE$10,000$33,65512.52%

A $10,000 investment in VB would have resulted in a final balance of $39,734. This is a profit of $29,734 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.25%.

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%.

VB’s CAGR is 1.73 percentage points higher than that of VOE and as a result, would have yielded $6,079 more on a $10,000 investment. Thus, VB outperformed VOE by 1.73% annually.


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