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

The expense ratio of VGK is 0.01 percentage points higher than VOE’s (0.08% vs. 0.07%). VGK also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VGK has provided lower returns than VOE over the past 11 years.

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

Summary

VGKVOE
NameVanguard FTSE Europe Index Fund ETF SharesVanguard Mid-Cap Value Index Fund ETF Shares
CategoryEurope StockMid-Cap Value
IssuerVanguardVanguard
AUM25.7B26.78B
Avg. Return6.68%12.52%
Div. Yield2.52%1.87%
Expense Ratio0.08%0.07%

The Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% 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%.

VGK’s dividend yield is 0.65% higher than that of VOE (2.52% vs. 1.87%). Also, VGK yielded on average 5.84% less per year over the past decade (6.68% vs. 12.52%). The expense ratio of VGK is 0.01 percentage points higher than VOE’s (0.08% vs. 0.07%).

Fund Composition

Industry Exposure

VGK vs. VOE - Industry Exposure

VGKVOE
Technology8.3%9.85%
Industrials15.58%9.4%
Energy4.3%5.69%
Communication Services5.09%5.27%
Utilities3.89%10.93%
Healthcare13.76%7.04%
Consumer Defensive11.39%4.85%
Real Estate2.57%11.48%
Financial Services15.85%18.26%
Consumer Cyclical11.6%11.8%
Basic Materials7.67%5.44%

The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.

VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.

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%.

VGK is 2.41% less exposed to the Financial Services sector than VOE (15.85% vs 18.26%). VGK’s exposure to Industrials and Healthcare stocks is 6.18% higher and 6.72% higher respectively (15.58% vs. 9.4% and 13.76% vs. 7.04%). In total, Utilities, Energy, and Communication Services also make up 8.61% less of the fund’s holdings compared to VOE (13.28% vs. 21.89%).

Holdings

VGK - Holdings

VGK HoldingsWeight
Nestle SA2.82%
ASML Holding NV2.2%
Roche Holding AG2.13%
LVMH Moet Hennessy Louis Vuitton SE1.58%
Novartis AG1.55%
AstraZeneca PLC1.27%
SAP SE1.25%
Unilever PLC1.23%
Novo Nordisk A/S B1.09%
Siemens AG0.96%

VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.

AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.

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%.

Risk Analysis

VGKVOE
Mean Return0.611.05
R-squared92.7688.76
Std. Deviation16.6515.98
Alpha0.45-3.77
Beta1.061.11
Sharpe Ratio0.40.75
Treynor Ratio5.1210.19

The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Standard Deviation of 16.65 with a R-squared of 92.76 and a Alpha of 0.45. Its Treynor Ratio is 5.12 while VGK’s Beta is 1.06. Furthermore, the fund has a Mean Return of 0.61 and a Sharpe Ratio of 0.4.

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

VGK’s Mean Return is 0.44 points lower than that of VOE and its R-squared is 4.00 points higher. With a Standard Deviation of 16.65, VGK is slightly more volatile than VOE. The Alpha and Beta of VGK are 4.22 points higher and 0.05 points lower than VOE’s Alpha and Beta.

Performance

Annual Returns

VGK vs. VOE - Annual Returns

YearVGKVOE
20206.5%2.5%
201924.26%27.98%
2018-14.79%-12.41%
201727.06%17.05%
2016-0.59%15.26%
2015-1.87%-1.8%
2014-6.56%13.98%
201324.93%37.65%
201221.01%16.04%
2011-11.49%-0.32%
20105.01%21.83%

VGK had its best year in 2017 with an annual return of 27.06%. VGK’s worst year over the past decade yielded -14.79% and occurred in 2018. In most years the Vanguard FTSE Europe Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to -0.59%, 5.01%, and 6.5% 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

VGK vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VGK$10,000$18,3506.68%
VOE$10,000$33,65512.52%

A $10,000 investment in VGK would have resulted in a final balance of $18,350. This is a profit of $8,350 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.68%.

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%.

VGK’s CAGR is 5.84 percentage points lower than that of VOE and as a result, would have yielded $15,305 less on a $10,000 investment. Thus, VGK performed worse than VOE by 5.84% annually.

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