The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the Vanguard Small-Cap Index Fund ETF Shares (VB) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and VB is a Vanguard Small Blend fund. So, what’s the difference between VIG and VB? And which fund is better?
The expense ratio of VIG is 0.01 percentage points higher than VB’s (0.06% vs. 0.05%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than VB over the past ten years.
In this article, we’ll compare VIG vs. VB. We’ll look at fund composition and annual returns, as well as at their performance and risk metrics. Moreover, I’ll also discuss VIG’s and VB’s holdings, portfolio growth, and industry exposure and examine how these affect their overall returns.
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Summary
| VIG | VB | |
| NameVanguard Dividend Appreciation Index Fund ETF SharesVanguard Small-Cap Index Fund ETF Shares | ||
| Category | Large Blend | Small Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 71.92B | 137.72B |
| Avg. Return | 13.35% | 14.25% |
| Div. Yield | 1.56% | 1.14% |
| Expense Ratio | 0.06% | 0.05% |
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.
The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.
VIG’s dividend yield is 0.42% higher than that of VB (1.56% vs. 1.14%). Also, VIG yielded on average 0.91% less per year over the past decade (13.35% vs. 14.25%). The expense ratio of VIG is 0.01 percentage points higher than VB’s (0.06% vs. 0.05%).
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Fund Composition
Industry Exposure
| VIG | VB | |
| Technology | 14.93% | 16.85% |
| Industrials | 17.23% | 16.11% |
| Energy | 0.0% | 3.67% |
| Communication Services | 2.86% | 2.4% |
| Utilities | 2.81% | 2.19% |
| Healthcare | 15.52% | 14.34% |
| Consumer Defensive | 15.32% | 4.14% |
| Real Estate | 0.0% | 9.56% |
| Financial Services | 17.18% | 13.06% |
| Consumer Cyclical | 10.47% | 13.03% |
| Basic Materials | 3.67% | 4.63% |
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.
VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.
The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.
VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.
VIG is 1.12% more exposed to the Industrials sector than VB (17.23% vs 16.11%). VIG’s exposure to Financial Services and Healthcare stocks is 4.12% higher and 1.18% higher respectively (17.18% vs. 13.06% and 15.52% vs. 14.34%). In total, Energy, Utilities, and Communication Services also make up 2.59% less of the fund’s holdings compared to VB (5.67% vs. 8.26%).
Holdings
| VIG Holdings | Weight |
| Microsoft Corp | 4.19% |
| JPMorgan Chase & Co | 3.8% |
| Johnson & Johnson | 3.67% |
| Walmart Inc | 3.38% |
| Visa Inc Class A | 3.22% |
| UnitedHealth Group Inc | 3.22% |
| The Home Depot Inc | 2.91% |
| Procter & Gamble Co | 2.82% |
| Comcast Corp Class A | 2.21% |
| Coca-Cola Co | 1.98% |
VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.
UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.
| VB Holdings | Weight |
| Charles River Laboratories International Inc | 0.34% |
| Pool Corp | 0.32% |
| Bio-Techne Corp | 0.32% |
| Avantor Inc | 0.32% |
| PerkinElmer Inc | 0.31% |
| Diamondback Energy Inc | 0.31% |
| VICI Properties Inc Ordinary Shares | 0.3% |
| IDEX Corp | 0.3% |
| Entegris Inc | 0.3% |
| Novavax Inc | 0.29% |
VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.
Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.
Risk Analysis
| VIG | VB | |
| Mean Return | 1.09 | 1.15 |
| R-squared | 92.2 | 85.03 |
| Std. Deviation | 12.25 | 17.82 |
| Alpha | 0.12 | -4.02 |
| Beta | 0.86 | 1.21 |
| Sharpe Ratio | 1.01 | 0.74 |
| Treynor Ratio | 14.33 | 10.15 |
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Standard Deviation of 12.25 with a Mean Return of 1.09 and a Treynor Ratio of 14.33. Its R-squared is 92.2 while VIG’s Alpha is 0.12. Furthermore, the fund has a Beta of 0.86 and a Sharpe Ratio of 1.01.
The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Mean Return of 1.15 with a R-squared of 85.03 and a Standard Deviation of 17.82. Its Beta is 1.21 while VB’s Sharpe Ratio is 0.74. Furthermore, the fund has a Alpha of -4.02 and a Treynor Ratio of 10.15.
VIG’s Mean Return is 0.06 points lower than that of VB and its R-squared is 7.17 points higher. With a Standard Deviation of 12.25, VIG is slightly less volatile than VB. The Alpha and Beta of VIG are 4.14 points higher and 0.35 points lower than VB’s Alpha and Beta.
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Performance
Annual Returns
| Year | VIG | VB |
| 2020 | 15.46% | 19.08% |
| 2019 | 29.71% | 27.37% |
| 2018 | -2.02% | -9.3% |
| 2017 | 22.22% | 16.24% |
| 2016 | 11.84% | 18.31% |
| 2015 | -1.95% | -3.65% |
| 2014 | 10.06% | 7.51% |
| 2013 | 28.99% | 37.8% |
| 2012 | 11.61% | 18.22% |
| 2011 | 6.21% | -2.68% |
| 2010 | 14.67% | 27.89% |
VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% respectively.
The year 2013 was the strongest year for VB, returning 37.8% on an annual basis. The poorest year for VB in the last ten years was 2018, with a yield of -9.3%. Most years the Vanguard Small-Cap Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2016, when gains were 16.24%, 18.22%, and 18.31% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VIG | $10,000 | $37,951 | 13.35% |
| VB | $10,000 | $39,734 | 14.25% |
A $10,000 investment in VIG would have resulted in a final balance of $37,951. This is a profit of $27,951 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.
With a $10,000 investment in VB, the end total would have been $39,734. This equates to a $29,734 profit over 11 years and a compound annual growth rate (CAGR) of 14.25%.
VIG’s CAGR is 0.91 percentage points lower than that of VB and as a result, would have yielded $1,783 less on a $10,000 investment. Thus, VIG performed worse than VB by 0.91% annually.
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