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VEU vs. VOE: What’s The Difference?

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

The expense ratio of VEU is 0.01 percentage points higher than VOE’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 VOE over the past ten years.

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

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Summary

VEUVOE
NameVanguard FTSE All-World ex-US Index Fund ETF SharesVanguard Mid-Cap Value Index Fund ETF Shares
CategoryForeign Large BlendMid-Cap Value
IssuerVanguardVanguard
AUM53.64B26.78B
Avg. Return6.64%12.52%
Div. Yield2.31%1.87%
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 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%.

VEU’s dividend yield is 0.44% higher than that of VOE (2.31% vs. 1.87%). Also, VEU yielded on average 5.89% less per year over the past decade (6.64% vs. 12.52%). The expense ratio of VEU is 0.01 percentage points higher than VOE’s (0.08% vs. 0.07%).

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Fund Composition

Industry Exposure

VEU vs. VOE - Industry Exposure

VEUVOE
Technology12.94%9.85%
Industrials12.19%9.4%
Energy4.69%5.69%
Communication Services7.44%5.27%
Utilities2.89%10.93%
Healthcare9.34%7.04%
Consumer Defensive8.28%4.85%
Real Estate3.04%11.48%
Financial Services18.46%18.26%
Consumer Cyclical12.57%11.8%
Basic Materials8.17%5.44%

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 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%.

VEU is 0.20% more exposed to the Financial Services sector than VOE (18.46% vs 18.26%). VEU’s exposure to Technology and Consumer Cyclical stocks is 3.09% higher and 0.77% higher respectively (12.94% vs. 9.85% and 12.57% vs. 11.8%). In total, Real Estate, Energy, and Communication Services also make up 7.27% less of the fund’s holdings compared to VOE (15.17% vs. 22.44%).

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%.

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

VEUVOE
Mean Return0.561.05
R-squared98.4488.76
Std. Deviation15.0815.98
Alpha0.28-3.77
Beta0.991.11
Sharpe Ratio0.40.75
Treynor Ratio5.1210.19

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

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

VEU’s Mean Return is 0.49 points lower than that of VOE and its R-squared is 9.68 points higher. With a Standard Deviation of 15.08, VEU is slightly less volatile than VOE. The Alpha and Beta of VEU are 4.05 points higher and 0.12 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

VEU vs. VOE - Annual Returns

YearVEUVOE
202011.39%2.5%
201921.63%27.98%
2018-13.97%-12.41%
201727.27%17.05%
20164.77%15.26%
2015-4.67%-1.8%
2014-4.05%13.98%
201314.5%37.65%
201218.55%16.04%
2011-14.25%-0.32%
201011.85%21.83%

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 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

VEU vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VEU$10,000$18,5076.64%
VOE$10,000$33,65512.52%

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 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%.

VEU’s CAGR is 5.89 percentage points lower than that of VOE and as a result, would have yielded $15,148 less on a $10,000 investment. Thus, VEU performed worse than VOE by 5.89% annually.


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