Skip to content

VEU vs. VBK: What’s The Difference?

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. VEU is a Vanguard Foreign Large Blend fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between VEU and VBK? And which fund is better?

The expense ratio of VEU is 0.01 percentage points higher than VBK’s (0.08% vs. 0.07%). VEU also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VEU has provided lower returns than VBK over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VEUVBK
NameVanguard FTSE All-World ex-US Index Fund ETF SharesVanguard Small-Cap Growth Index Fund ETF Shares
CategoryForeign Large BlendSmall Growth
IssuerVanguardVanguard
AUM53.64B37.89B
Avg. Return6.64%16.53%
Div. Yield2.31%0.45%
Expense Ratio0.08%0.07%

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 0.08%.

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%.

VEU’s dividend yield is 1.86% higher than that of VBK (2.31% vs. 0.45%). Also, VEU yielded on average 9.89% less per year over the past decade (6.64% vs. 16.53%). The expense ratio of VEU is 0.01 percentage points higher than VBK’s (0.08% vs. 0.07%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

VEU vs. VBK - Industry Exposure

VEUVBK
Technology12.94%27.87%
Industrials12.19%13.19%
Energy4.69%1.77%
Communication Services7.44%3.24%
Utilities2.89%0.32%
Healthcare9.34%23.24%
Consumer Defensive8.28%3.83%
Real Estate3.04%7.87%
Financial Services18.46%4.05%
Consumer Cyclical12.57%12.13%
Basic Materials8.17%2.49%

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has the most exposure to the Financial Services sector at 18.46%. This is followed by Technology and Consumer Cyclical at 12.94% and 12.57% respectively. Real Estate (3.04%), Energy (4.69%), and Communication Services (7.44%) only make up 15.17% of the fund’s total assets.

VEU’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Industrials, and Consumer Cyclical stocks at 8.17%, 8.28%, 9.34%, 12.19%, and 12.57%.

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%.

VEU is 14.41% more exposed to the Financial Services sector than VBK (18.46% vs 4.05%). VEU’s exposure to Technology and Consumer Cyclical stocks is 14.93% lower and 0.44% higher respectively (12.94% vs. 27.87% and 12.57% vs. 12.13%). In total, Real Estate, Energy, and Communication Services also make up 2.29% more of the fund’s holdings compared to VBK (15.17% vs. 12.88%).

Holdings

VEU - Holdings

VEU HoldingsWeight
Tencent Holdings Ltd1.57%
Alibaba Group Holding Ltd Ordinary Shares1.4%
Nestle SA1.22%
Taiwan Semiconductor Manufacturing Co Ltd0.98%
ASML Holding NV0.95%
Taiwan Semiconductor Manufacturing Co Ltd ADR0.91%
Roche Holding AG0.91%
Toyota Motor Corp0.75%
LVMH Moet Hennessy Louis Vuitton SE0.68%
Novartis AG0.67%

VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.

Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.

VBK - Holdings

VBK HoldingsWeight
Charles River Laboratories International Inc0.78%
Pool Corp0.73%
Bio-Techne Corp0.73%
Avantor Inc0.73%
PerkinElmer Inc0.72%
Entegris Inc0.7%
PTC Inc0.62%
Fair Isaac Corp0.57%
Bill.com Holdings Inc Ordinary Shares0.56%
Avalara Inc0.55%

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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

VEUVBK
Mean Return0.561.22
R-squared98.4480.56
Std. Deviation15.0817.95
Alpha0.28-2.81
Beta0.991.18
Sharpe Ratio0.40.78
Treynor Ratio5.1211.18

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a Treynor Ratio of 5.12 with a Sharpe Ratio of 0.4 and a Mean Return of 0.56. Its R-squared is 98.44 while VEU’s Beta is 0.99. Furthermore, the fund has a Alpha of 0.28 and a Standard Deviation of 15.08.

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Mean Return of 1.22 with a Alpha of -2.81 and a Sharpe Ratio of 0.78. Its R-squared is 80.56 while VBK’s Standard Deviation is 17.95. Furthermore, the fund has a Treynor Ratio of 11.18 and a Beta of 1.18.

VEU’s Mean Return is 0.66 points lower than that of VBK and its R-squared is 17.88 points higher. With a Standard Deviation of 15.08, VEU is slightly less volatile than VBK. The Alpha and Beta of VEU are 3.09 points higher and 0.19 points lower than VBK’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

VEU vs. VBK - Annual Returns

YearVEUVBK
202011.39%35.29%
201921.63%32.75%
2018-13.97%-5.68%
201727.27%21.9%
20164.77%10.74%
2015-4.67%-2.51%
2014-4.05%4.02%
201314.5%38.18%
201218.55%17.67%
2011-14.25%-1.43%
201011.85%30.87%

VEU had its best year in 2017 with an annual return of 27.27%. VEU’s worst year over the past decade yielded -14.25% and occurred in 2011. In most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares provided moderate returns such as in 2016, 2020, and 2010 where annual returns amounted to 4.77%, 11.39%, and 11.85% respectively.

The year 2013 was the strongest year for VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.

Portfolio Growth

VEU vs. VBK - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VEU$10,000$18,5076.64%
VBK$10,000$48,63916.53%

A $10,000 investment in VEU would have resulted in a final balance of $18,507. This is a profit of $8,507 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.64%.

With a $10,000 investment in VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.

VEU’s CAGR is 9.89 percentage points lower than that of VBK and as a result, would have yielded $30,132 less on a $10,000 investment. Thus, VEU performed worse than VBK by 9.89% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.