VIG vs. VOE: What’s The Difference?

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

The expense ratio of VIG is 0.01 percentage points lower than VOE’s (0.06% vs. 0.07%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided higher returns than VOE over the past ten years.

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

Summary

VIG VOE
Name Vanguard Dividend Appreciation Index Fund ETF Shares Vanguard Mid-Cap Value Index Fund ETF Shares
Category Large Blend Mid-Cap Value
Issuer Vanguard Vanguard
AUM 71.92B 26.78B
Avg. Return 13.35% 12.52%
Div. Yield 1.56% 1.87%
Expense Ratio 0.06% 0.07%

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 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%.

VIG’s dividend yield is 0.31% lower than that of VOE (1.56% vs. 1.87%). Also, VIG yielded on average 0.82% more per year over the past decade (13.35% vs. 12.52%). The expense ratio of VIG is 0.01 percentage points lower than VOE’s (0.06% vs. 0.07%).

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Fund Composition

Industry Exposure

VIG vs. VOE - Industry Exposure

VIG VOE
Technology 14.93% 9.85%
Industrials 17.23% 9.4%
Energy 0.0% 5.69%
Communication Services 2.86% 5.27%
Utilities 2.81% 10.93%
Healthcare 15.52% 7.04%
Consumer Defensive 15.32% 4.85%
Real Estate 0.0% 11.48%
Financial Services 17.18% 18.26%
Consumer Cyclical 10.47% 11.8%
Basic Materials 3.67% 5.44%

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 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%.

VIG is 7.83% more exposed to the Industrials sector than VOE (17.23% vs 9.4%). VIG’s exposure to Financial Services and Healthcare stocks is 1.08% lower and 8.48% higher respectively (17.18% vs. 18.26% and 15.52% vs. 7.04%). In total, Energy, Utilities, and Communication Services also make up 16.22% less of the fund’s holdings compared to VOE (5.67% vs. 21.89%).

Holdings

VIG - 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%.

VOE - Holdings

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%.

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Risk Analysis

VIG VOE
Mean Return 1.09 1.05
R-squared 92.2 88.76
Std. Deviation 12.25 15.98
Alpha 0.12 -3.77
Beta 0.86 1.11
Sharpe Ratio 1.01 0.75
Treynor Ratio 14.33 10.19

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Alpha of 0.12 with a R-squared of 92.2 and a Standard Deviation of 12.25. Its Treynor Ratio is 14.33 while VIG’s Beta is 0.86. Furthermore, the fund has a Mean Return of 1.09 and a Sharpe Ratio of 1.01.

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

VIG’s Mean Return is 0.04 points higher than that of VOE and its R-squared is 3.44 points higher. With a Standard Deviation of 12.25, VIG is slightly less volatile than VOE. The Alpha and Beta of VIG are 3.89 points higher and 0.25 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. VOE - Annual Returns

Year VIG VOE
2020 15.46% 2.5%
2019 29.71% 27.98%
2018 -2.02% -12.41%
2017 22.22% 17.05%
2016 11.84% 15.26%
2015 -1.95% -1.8%
2014 10.06% 13.98%
2013 28.99% 37.65%
2012 11.61% 16.04%
2011 6.21% -0.32%
2010 14.67% 21.83%

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 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

VIG vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $37,951 13.35%
VOE $10,000 $33,655 12.52%

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 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%.

VIG’s CAGR is 0.82 percentage points higher than that of VOE and as a result, would have yielded $4,296 more on a $10,000 investment. Thus, VIG outperformed VOE by 0.82% annually.


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