The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between VIG and VXF? And which fund is better?
VIG and VXF have the same expense ratio: 0.06%. VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than VXF over the past ten years.
In this article, we’ll compare VIG vs. VXF. We’ll look at holdings and annual returns, as well as at their performance and risk metrics. Moreover, I’ll also discuss VIG’s and VXF’s industry exposure, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||Vanguard Dividend Appreciation Index Fund ETF Shares||Vanguard Extended Market Index Fund ETF Shares|
|Category||Large Blend||Mid-Cap Growth|
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 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%.
VIG’s dividend yield is 0.37% higher than that of VXF (1.56% vs. 1.19%). Also, VIG yielded on average 2.13% less per year over the past decade (13.35% vs. 15.47%). VIG and VXF have the same expense ratio: 0.06%.
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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 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%.
VIG is 5.92% more exposed to the Industrials sector than VXF (17.23% vs 11.31%). VIG’s exposure to Financial Services and Healthcare stocks is 4.62% higher and 0.27% higher respectively (17.18% vs. 12.56% and 15.52% vs. 15.25%). In total, Energy, Utilities, and Communication Services also make up 5.73% less of the fund’s holdings compared to VXF (5.67% vs. 11.40%).
|JPMorgan Chase & Co||3.8%|
|Johnson & Johnson||3.67%|
|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%|
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%.
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|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%.
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The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Mean Return of 1.09 with a Treynor Ratio of 14.33 and a Beta of 0.86. Its R-squared is 92.2 while VIG’s Alpha is 0.12. Furthermore, the fund has a Standard Deviation of 12.25 and a Sharpe Ratio of 1.01.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Treynor Ratio of 10.92 with a Standard Deviation of 18.04 and a Alpha of -3.26. Its Beta is 1.23 while VXF’s Mean Return is 1.24. Furthermore, the fund has a Sharpe Ratio of 0.79 and a R-squared of 85.73.
VIG’s Mean Return is 0.15 points lower than that of VXF and its R-squared is 6.47 points higher. With a Standard Deviation of 12.25, VIG is slightly less volatile than VXF. The Alpha and Beta of VIG are 3.38 points higher and 0.37 points lower than VXF’s Alpha and Beta.
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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 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.
|Fund||Initial Balance||Final Balance||CAGR|
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 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%.
VIG’s CAGR is 2.13 percentage points lower than that of VXF and as a result, would have yielded $6,179 less on a $10,000 investment. Thus, VIG performed worse than VXF by 2.13% annually.
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