VO vs. VOE: What’s The Difference?

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

The expense ratio of VO is 0.03 percentage points lower than VOE’s (0.04% vs. 0.07%). VO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VO has provided higher returns than VOE over the past ten years.

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

Summary

VO VOE
Name Vanguard Mid-Cap Index Fund ETF Shares Vanguard Mid-Cap Value Index Fund ETF Shares
Category Mid-Cap Blend Mid-Cap Value
Issuer Vanguard Vanguard
AUM 154.08B 26.78B
Avg. Return 14.34% 12.52%
Div. Yield 1.23% 1.87%
Expense Ratio 0.04% 0.07%

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 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%.

VO’s dividend yield is 0.64% lower than that of VOE (1.23% vs. 1.87%). Also, VO yielded on average 1.81% more per year over the past decade (14.34% vs. 12.52%). The expense ratio of VO is 0.03 percentage points lower than VOE’s (0.04% vs. 0.07%).

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Fund Composition

Industry Exposure

VO vs. VOE - Industry Exposure

VO VOE
Technology 22.01% 9.85%
Industrials 11.92% 9.4%
Energy 3.82% 5.69%
Communication Services 5.61% 5.27%
Utilities 5.12% 10.93%
Healthcare 13.03% 7.04%
Consumer Defensive 3.25% 4.85%
Real Estate 8.67% 11.48%
Financial Services 11.08% 18.26%
Consumer Cyclical 12.12% 11.8%
Basic Materials 3.36% 5.44%

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 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%.

VO is 12.16% more exposed to the Technology sector than VOE (22.01% vs 9.85%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 5.99% higher and 0.32% higher respectively (13.03% vs. 7.04% and 12.12% vs. 11.8%). In total, Basic Materials, Energy, and Utilities also make up 9.76% less of the fund’s holdings compared to VOE (12.30% vs. 22.06%).

Holdings

VO - Holdings

VO Holdings Weight
IDEXX Laboratories Inc 0.78%
DocuSign Inc 0.75%
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%
Centene Corp 0.62%
Aptiv PLC 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%.

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

VO VOE
Mean Return 1.14 1.05
R-squared 92.22 88.76
Std. Deviation 15.65 15.98
Alpha -2.71 -3.77
Beta 1.11 1.11
Sharpe Ratio 0.83 0.75
Treynor Ratio 11.32 10.19

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Treynor Ratio of 11.32 with a Beta of 1.11 and a R-squared of 92.22. Its Mean Return is 1.14 while VO’s Alpha is -2.71. Furthermore, the fund has a Standard Deviation of 15.65 and a Sharpe Ratio of 0.83.

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

VO’s Mean Return is 0.09 points higher than that of VOE and its R-squared is 3.46 points higher. With a Standard Deviation of 15.65, VO is slightly less volatile than VOE. The Alpha and Beta of VO are 1.06 points higher and 0.00 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

VO vs. VOE - Annual Returns

Year VO VOE
2020 18.22% 2.5%
2019 31.04% 27.98%
2018 -9.21% -12.41%
2017 19.25% 17.05%
2016 11.23% 15.26%
2015 -1.34% -1.8%
2014 13.76% 13.98%
2013 35.15% 37.65%
2012 15.98% 16.04%
2011 -1.96% -0.32%
2010 25.57% 21.83%

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 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

VO vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VO $10,000 $40,404 14.34%
VOE $10,000 $33,655 12.52%

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 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%.

VO’s CAGR is 1.81 percentage points higher than that of VOE and as a result, would have yielded $6,749 more on a $10,000 investment. Thus, VO outperformed VOE by 1.81% annually.


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