The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between VO and EFV? And which fund is better?
The expense ratio of VO is 0.35 percentage points lower than EFV’s (0.04% vs. 0.39%). VO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VO has provided higher returns than EFV over the past ten years.
In this article, we’ll compare VO vs. EFV. We’ll look at risk metrics and fund composition, as well as at their annual returns and portfolio growth. Moreover, I’ll also discuss VO’s and EFV’s performance, holdings, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Mid-Cap Index Fund ETF Shares||iShares MSCI EAFE Value ETF|
|Category||Mid-Cap Blend||Foreign Large Value|
The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
VO’s dividend yield is 1.71% lower than that of EFV (1.23% vs. 2.94%). Also, VO yielded on average 10.34% more per year over the past decade (14.34% vs. 3.99%). The expense ratio of VO is 0.35 percentage points lower than EFV’s (0.04% vs. 0.39%).
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The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
VO is 19.03% more exposed to the Technology sector than EFV (22.01% vs 2.98%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 3.84% higher and 3.12% higher respectively (13.03% vs. 9.19% and 12.12% vs. 9.0%). In total, Basic Materials, Energy, and Utilities also make up 10.03% less of the fund’s holdings compared to EFV (12.30% vs. 22.33%).
|IDEXX Laboratories Inc||0.78%|
|Marvell Technology Inc||0.68%|
|IQVIA Holdings Inc||0.68%|
|Chipotle Mexican Grill Inc||0.63%|
|Veeva Systems Inc Class A||0.62%|
|Digital Realty Trust Inc||0.62%|
|Carrier Global Corp Ordinary Shares||0.61%|
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
|Toyota Motor Corp||2.21%|
|Commonwealth Bank of Australia||1.59%|
|HSBC Holdings PLC||1.4%|
|Rio Tinto PLC||1.1%|
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
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The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Mean Return of 1.14 with a Treynor Ratio of 11.32 and a R-squared of 92.22. Its Sharpe Ratio is 0.83 while VO’s Standard Deviation is 15.65. Furthermore, the fund has a Alpha of -2.71 and a Beta of 1.11.
The iShares MSCI EAFE Value ETF (EFV) has a Standard Deviation of 16.53 with a Sharpe Ratio of 0.26 and a Mean Return of 0.42. Its Treynor Ratio is 2.92 while EFV’s Beta is 1.05. Furthermore, the fund has a Alpha of -1.77 and a R-squared of 92.15.
VO’s Mean Return is 0.72 points higher than that of EFV and its R-squared is 0.07 points higher. With a Standard Deviation of 15.65, VO is slightly less volatile than EFV. The Alpha and Beta of VO are 0.94 points lower and 0.06 points higher than EFV’s Alpha and Beta.
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VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% respectively.
The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VO would have resulted in a final balance of $40,404. This is a profit of $30,404 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.34%.
With a $10,000 investment in EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.
VO’s CAGR is 10.34 percentage points higher than that of EFV and as a result, would have yielded $26,270 more on a $10,000 investment. Thus, VO outperformed EFV by 10.34% annually.
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