The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between VGT and VXF? And which fund is better?
The expense ratio of VGT is 0.04 percentage points higher than VXF’s (0.1% vs. 0.06%). VGT also has a higher exposure to the technology sector and a lower standard deviation. Overall, VGT has provided higher returns than VXF over the past ten years.
In this article, we’ll compare VGT vs. VXF. We’ll look at risk metrics and fund composition, as well as at their performance and holdings. Moreover, I’ll also discuss VGT’s and VXF’s annual returns, portfolio growth, and industry exposure and examine how these affect their overall returns.
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Summary
| VGT | VXF | |
| Name | Vanguard Information Technology Index Fund ETF Shares | Vanguard Extended Market Index Fund ETF Shares |
| Category | Technology | Mid-Cap Growth |
| Issuer | Vanguard | Vanguard |
| AUM | 54.13B | 114.53B |
| Avg. Return | 20.84% | 15.47% |
| Div. Yield | 0.66% | 1.19% |
| Expense Ratio | 0.1% | 0.06% |
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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
VGT’s dividend yield is 0.53% lower than that of VXF (0.66% vs. 1.19%). Also, VGT yielded on average 5.36% more per year over the past decade (20.84% vs. 15.47%). The expense ratio of VGT is 0.04 percentage points higher than VXF’s (0.1% vs. 0.06%).
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Fund Composition
Industry Exposure
| VGT | VXF | |
| Technology | 88.89% | 23.61% |
| Industrials | 1.67% | 11.31% |
| Energy | 0.0% | 2.46% |
| Communication Services | 0.61% | 7.29% |
| Utilities | 0.0% | 1.65% |
| Healthcare | 0.0% | 15.25% |
| Consumer Defensive | 0.0% | 3.09% |
| Real Estate | 0.0% | 8.16% |
| Financial Services | 8.83% | 12.56% |
| Consumer Cyclical | 0.0% | 11.35% |
| Basic Materials | 0.0% | 3.26% |
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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
VGT is 65.28% more exposed to the Technology sector than VXF (88.89% vs 23.61%). VGT’s exposure to Financial Services and Industrials stocks is 3.73% lower and 9.64% lower respectively (8.83% vs. 12.56% and 1.67% vs. 11.31%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 22.60% less of the fund’s holdings compared to VXF (0.00% vs. 22.60%).
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%.
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
Risk Analysis
| VGT | VXF | |
| Mean Return | 1.76 | 1.24 |
| R-squared | 74.84 | 85.73 |
| Std. Deviation | 16.61 | 18.04 |
| Alpha | 10.41 | -3.26 |
| Beta | 1.02 | 1.23 |
| Sharpe Ratio | 1.23 | 0.79 |
| Treynor Ratio | 20.55 | 10.92 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Treynor Ratio of 20.55 with a Sharpe Ratio of 1.23 and a Mean Return of 1.76. Its R-squared is 74.84 while VGT’s Beta is 1.02. Furthermore, the fund has a Alpha of 10.41 and a Standard Deviation of 16.61.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Standard Deviation of 18.04 with a Sharpe Ratio of 0.79 and a Beta of 1.23. Its R-squared is 85.73 while VXF’s Alpha is -3.26. Furthermore, the fund has a Treynor Ratio of 10.92 and a Mean Return of 1.24.
VGT’s Mean Return is 0.52 points higher than that of VXF and its R-squared is 10.89 points lower. With a Standard Deviation of 16.61, VGT is slightly less volatile than VXF. The Alpha and Beta of VGT are 13.67 points higher and 0.21 points lower than VXF’s Alpha and Beta.
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Performance
Annual Returns
| Year | VGT | VXF |
| 2020 | 45.94% | 32.19% |
| 2019 | 48.68% | 28.04% |
| 2018 | 2.52% | -9.37% |
| 2017 | 37.07% | 18.1% |
| 2016 | 13.73% | 16.16% |
| 2015 | 5.02% | -3.26% |
| 2014 | 18.01% | 7.55% |
| 2013 | 30.91% | 38.37% |
| 2012 | 14.05% | 18.48% |
| 2011 | 0.52% | -3.61% |
| 2010 | 12.74% | 27.55% |
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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VGT | $10,000 | $72,718 | 20.84% |
| VXF | $10,000 | $44,130 | 15.47% |
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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
VGT’s CAGR is 5.36 percentage points higher than that of VXF and as a result, would have yielded $28,588 more on a $10,000 investment. Thus, VGT outperformed VXF by 5.36% annually.
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