The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. VBK is a Vanguard Small Growth fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between VBK and VOE? And which fund is better?
VBK and VOE have the same expense ratio: 0.07%. VBK also has a higher exposure to the technology sector and a higher standard deviation. Overall, VBK has provided higher returns than VOE over the past 11 years.
In this article, we’ll compare VBK vs. VOE. We’ll look at risk metrics and portfolio growth, as well as at their performance and holdings. Moreover, I’ll also discuss VBK’s and VOE’s industry exposure, annual returns, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Small-Cap Growth Index Fund ETF Shares||Vanguard Mid-Cap Value Index Fund ETF Shares|
|Category||Small Growth||Mid-Cap Value|
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.
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%.
VBK’s dividend yield is 1.42% lower than that of VOE (0.45% vs. 1.87%). Also, VBK yielded on average 4.00% more per year over the past decade (16.53% vs. 12.52%). VBK and VOE have the same expense ratio: 0.07%.
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The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.
VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.
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%.
VBK is 18.02% more exposed to the Technology sector than VOE (27.87% vs 9.85%). VBK’s exposure to Healthcare and Industrials stocks is 16.20% higher and 3.79% higher respectively (23.24% vs. 7.04% and 13.19% vs. 9.4%). In total, Energy, Basic Materials, and Communication Services also make up 8.90% less of the fund’s holdings compared to VOE (7.50% vs. 16.40%).
|Charles River Laboratories International Inc||0.78%|
|Fair Isaac Corp||0.57%|
|Bill.com Holdings Inc Ordinary Shares||0.56%|
VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.
Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.
|Carrier Global Corp Ordinary Shares||1.28%|
|International Flavors & Fragrances Inc||1.13%|
|Motorola Solutions Inc||1.12%|
|Discover Financial Services||1.09%|
|Valero Energy Corp||0.97%|
|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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The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Alpha of -2.81 with a R-squared of 80.56 and a Mean Return of 1.22. Its Sharpe Ratio is 0.78 while VBK’s Treynor Ratio is 11.18. Furthermore, the fund has a Standard Deviation of 17.95 and a Beta of 1.18.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Standard Deviation of 15.98 with a Mean Return of 1.05 and a Beta of 1.11. Its Sharpe Ratio is 0.75 while VOE’s Treynor Ratio is 10.19. Furthermore, the fund has a R-squared of 88.76 and a Alpha of -3.77.
VBK’s Mean Return is 0.17 points higher than that of VOE and its R-squared is 8.20 points lower. With a Standard Deviation of 17.95, VBK is slightly more volatile than VOE. The Alpha and Beta of VBK are 0.96 points higher and 0.07 points higher than VOE’s Alpha and Beta.
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VBK had its best year in 2013 with an annual return of 38.18%. VBK’s worst year over the past decade yielded -5.68% and occurred in 2018. In most years the Vanguard Small-Cap Growth Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2017 where annual returns amounted to 10.74%, 17.67%, and 21.9% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VBK would have resulted in a final balance of $48,639. This is a profit of $38,639 over 11 years and amounts to a compound annual growth rate (CAGR) of 16.53%.
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%.
VBK’s CAGR is 4.00 percentage points higher than that of VOE and as a result, would have yielded $14,984 more on a $10,000 investment. Thus, VBK outperformed VOE by 4.00% annually.
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