The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between VGT and VOE? And which fund is better?
The expense ratio of VGT is 0.03 percentage points higher than VOE’s (0.1% vs. 0.07%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than VOE over the past ten years.
In this article, we’ll compare VGT vs. VOE. We’ll look at performance and fund composition, as well as at their holdings and risk metrics. Moreover, I’ll also discuss VGT’s and VOE’s industry exposure, annual returns, and portfolio growth and examine how these affect their overall returns.
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Summary
| VGT | VOE | |
| Name | Vanguard Information Technology Index Fund ETF Shares | Vanguard Mid-Cap Value Index Fund ETF Shares |
| Category | Technology | Mid-Cap Value |
| Issuer | Vanguard | Vanguard |
| AUM | 54.13B | 26.78B |
| Avg. Return | 20.84% | 12.52% |
| Div. Yield | 0.66% | 1.87% |
| Expense Ratio | 0.1% | 0.07% |
The Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.
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%.
VGT’s dividend yield is 1.21% lower than that of VOE (0.66% vs. 1.87%). Also, VGT yielded on average 8.31% more per year over the past decade (20.84% vs. 12.52%). The expense ratio of VGT is 0.03 percentage points higher than VOE’s (0.1% vs. 0.07%).
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Fund Composition
Industry Exposure
| VGT | VOE | |
| Technology | 88.89% | 9.85% |
| Industrials | 1.67% | 9.4% |
| Energy | 0.0% | 5.69% |
| Communication Services | 0.61% | 5.27% |
| Utilities | 0.0% | 10.93% |
| Healthcare | 0.0% | 7.04% |
| Consumer Defensive | 0.0% | 4.85% |
| Real Estate | 0.0% | 11.48% |
| Financial Services | 8.83% | 18.26% |
| Consumer Cyclical | 0.0% | 11.8% |
| Basic Materials | 0.0% | 5.44% |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.
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%.
VGT is 79.04% more exposed to the Technology sector than VOE (88.89% vs 9.85%). VGT’s exposure to Financial Services and Industrials stocks is 9.43% lower and 7.73% lower respectively (8.83% vs. 18.26% and 1.67% vs. 9.4%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 28.13% less of the fund’s holdings compared to VOE (0.00% vs. 28.13%).
Holdings
| VGT Holdings | Weight |
| Apple Inc | 19.58% |
| Microsoft Corp | 16.53% |
| NVIDIA Corp | 4.22% |
| Visa Inc Class A | 3.16% |
| PayPal Holdings Inc | 2.76% |
| Mastercard Inc Class A | 2.76% |
| Adobe Inc | 2.39% |
| Intel Corp | 1.94% |
| Salesforce.com Inc | 1.91% |
| Cisco Systems Inc | 1.9% |
VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.
Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.
| 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%.
Risk Analysis
| VGT | VOE | |
| Mean Return | 1.76 | 1.05 |
| R-squared | 74.84 | 88.76 |
| Std. Deviation | 16.61 | 15.98 |
| Alpha | 10.41 | -3.77 |
| Beta | 1.02 | 1.11 |
| Sharpe Ratio | 1.23 | 0.75 |
| Treynor Ratio | 20.55 | 10.19 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Alpha of 10.41 with a Mean Return of 1.76 and a R-squared of 74.84. Its Treynor Ratio is 20.55 while VGT’s Standard Deviation is 16.61. Furthermore, the fund has a Beta of 1.02 and a Sharpe Ratio of 1.23.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Beta of 1.11 with a Sharpe Ratio of 0.75 and a Standard Deviation of 15.98. Its R-squared is 88.76 while VOE’s Mean Return is 1.05. Furthermore, the fund has a Alpha of -3.77 and a Treynor Ratio of 10.19.
VGT’s Mean Return is 0.71 points higher than that of VOE and its R-squared is 13.92 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than VOE. The Alpha and Beta of VGT are 14.18 points higher and 0.09 points lower than VOE’s Alpha and Beta.
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Performance
Annual Returns
| Year | VGT | VOE |
| 2020 | 45.94% | 2.5% |
| 2019 | 48.68% | 27.98% |
| 2018 | 2.52% | -12.41% |
| 2017 | 37.07% | 17.05% |
| 2016 | 13.73% | 15.26% |
| 2015 | 5.02% | -1.8% |
| 2014 | 18.01% | 13.98% |
| 2013 | 30.91% | 37.65% |
| 2012 | 14.05% | 16.04% |
| 2011 | 0.52% | -0.32% |
| 2010 | 12.74% | 21.83% |
VGT had its best year in 2019 with an annual return of 48.68%. VGT’s worst year over the past decade yielded 0.52% and occurred in 2011. In most years the Vanguard Information Technology Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 13.73%, 14.05%, and 18.01% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VGT | $10,000 | $72,718 | 20.84% |
| VOE | $10,000 | $33,655 | 12.52% |
A $10,000 investment in VGT would have resulted in a final balance of $72,718. This is a profit of $62,718 over 11 years and amounts to a compound annual growth rate (CAGR) of 20.84%.
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%.
VGT’s CAGR is 8.31 percentage points higher than that of VOE and as a result, would have yielded $39,063 more on a $10,000 investment. Thus, VGT outperformed VOE by 8.31% annually.
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