VEA vs. VOE: What’s The Difference?

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

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

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

Summary

VEA VOE
Name Vanguard FTSE Developed Markets Index Fund ETF Shares Vanguard Mid-Cap Value Index Fund ETF Shares
Category Foreign Large Blend Mid-Cap Value
Issuer Vanguard Vanguard
AUM 157.48B 26.78B
Avg. Return 7.05% 12.52%
Div. Yield 2.49% 1.87%
Expense Ratio 0.05% 0.07%

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 157.48B total assets under management and has yielded an average annual return of 7.05% over the past 10 years. The fund has a dividend yield of 2.49% 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%.

VEA’s dividend yield is 0.62% higher than that of VOE (2.49% vs. 1.87%). Also, VEA yielded on average 5.47% less per year over the past decade (7.05% vs. 12.52%). The expense ratio of VEA is 0.02 percentage points lower than VOE’s (0.05% vs. 0.07%).

Fund Composition

Industry Exposure

VEA vs. VOE - Industry Exposure

VEA VOE
Technology 11.67% 9.85%
Industrials 15.47% 9.4%
Energy 4.17% 5.69%
Communication Services 5.41% 5.27%
Utilities 3.1% 10.93%
Healthcare 10.6% 7.04%
Consumer Defensive 8.61% 4.85%
Real Estate 4.04% 11.48%
Financial Services 17.39% 18.26%
Consumer Cyclical 11.31% 11.8%
Basic Materials 8.24% 5.44%

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) has the most exposure to the Financial Services sector at 17.39%. This is followed by Industrials and Technology at 15.47% and 11.67% respectively. Real Estate (4.04%), Energy (4.17%), and Communication Services (5.41%) only make up 13.62% of the fund’s total assets.

VEA’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Consumer Cyclical, and Technology stocks at 8.24%, 8.61%, 10.6%, 11.31%, and 11.67%.

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%.

VEA is 0.87% less exposed to the Financial Services sector than VOE (17.39% vs 18.26%). VEA’s exposure to Industrials and Technology stocks is 6.07% higher and 1.82% higher respectively (15.47% vs. 9.4% and 11.67% vs. 9.85%). In total, Real Estate, Energy, and Communication Services also make up 8.82% less of the fund’s holdings compared to VOE (13.62% vs. 22.44%).

Holdings

VEA - Holdings

VEA Holdings Weight
Nestle SA 1.5%
Samsung Electronics Co Ltd 1.4%
ASML Holding NV 1.16%
Roche Holding AG 1.1%
Toyota Motor Corp 0.92%
LVMH Moet Hennessy Louis Vuitton SE 0.84%
Novartis AG 0.82%
Shopify Inc A 0.7%
AstraZeneca PLC 0.67%
SAP SE 0.66%

VEA’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.5%, 1.4%, 1.16%, 1.1%, and 0.92%.

LVMH Moet Hennessy Louis Vuitton SE (0.84%), Novartis AG (0.82%), and Shopify Inc A (0.7%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the VEA’s holdings at 0.67% and 0.66%.

VOE - Holdings

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%.

Performance

Annual Returns

VEA vs. VOE - Annual Returns

Year VEA VOE
2020 10.29% 2.5%
2019 22.08% 27.98%
2018 -14.47% -12.41%
2017 26.44% 17.05%
2016 2.51% 15.26%
2015 -0.21% -1.8%
2014 -5.71% 13.98%
2013 22.12% 37.65%
2012 18.6% 16.04%
2011 -12.57% -0.32%
2010 8.47% 21.83%

VEA had its best year in 2017 with an annual return of 26.44%. VEA’s worst year over the past decade yielded -14.47% and occurred in 2018. In most years the Vanguard FTSE Developed Markets Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.51%, 8.47%, and 10.29% 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

VEA vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VEA $10,000 $19,290 7.05%
VOE $10,000 $33,655 12.52%

A $10,000 investment in VEA would have resulted in a final balance of $19,290. This is a profit of $9,290 over 11 years and amounts to a compound annual growth rate (CAGR) of 7.05%.

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%.

VEA’s CAGR is 5.47 percentage points lower than that of VOE and as a result, would have yielded $14,365 less on a $10,000 investment. Thus, VEA performed worse than VOE by 5.47% annually.


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