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VO vs. VV: What’s The Difference?

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

VO and VV have the same expense ratio: 0.04%. VO also has a lower exposure to the technology sector and a higher standard deviation. Overall, VO has provided lower returns than VV over the past ten years.

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

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Summary

VOVV
NameVanguard Mid-Cap Index Fund ETF SharesVanguard Large-Cap Index Fund ETF Shares
CategoryMid-Cap BlendLarge Blend
IssuerVanguardVanguard
AUM154.08B37.65B
Avg. Return14.34%14.75%
Div. Yield1.23%1.26%
Expense Ratio0.04%0.04%

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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.

VO’s dividend yield is 0.03% lower than that of VV (1.23% vs. 1.26%). Also, VO yielded on average 0.41% less per year over the past decade (14.34% vs. 14.75%). VO and VV have the same expense ratio: 0.04%.

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Fund Composition

Industry Exposure

VO vs. VV - Industry Exposure

VOVV
Technology22.01%25.38%
Industrials11.92%8.39%
Energy3.82%2.62%
Communication Services5.61%11.68%
Utilities5.12%2.35%
Healthcare13.03%13.22%
Consumer Defensive3.25%6.06%
Real Estate8.67%2.7%
Financial Services11.08%13.82%
Consumer Cyclical12.12%11.65%
Basic Materials3.36%2.13%

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 Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.

VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.

VO is 3.37% less exposed to the Technology sector than VV (22.01% vs 25.38%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 0.19% lower and 0.47% higher respectively (13.03% vs. 13.22% and 12.12% vs. 11.65%). In total, Basic Materials, Energy, and Utilities also make up 5.20% more of the fund’s holdings compared to VV (12.30% vs. 7.10%).

Holdings

VO - Holdings

VO HoldingsWeight
IDEXX Laboratories Inc0.78%
DocuSign Inc0.75%
Marvell Technology Inc0.68%
IQVIA Holdings Inc0.68%
Chipotle Mexican Grill Inc0.63%
Veeva Systems Inc Class A0.62%
Digital Realty Trust Inc0.62%
Centene Corp0.62%
Aptiv PLC0.62%
Carrier Global Corp Ordinary Shares0.61%

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%.

VV - Holdings

VV HoldingsWeight
Apple Inc5.7%
Microsoft Corp5.35%
Amazon.com Inc3.87%
Facebook Inc Class A2.19%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.81%
Tesla Inc1.37%
Berkshire Hathaway Inc Class B1.3%
NVIDIA Corp1.24%
JPMorgan Chase & Co1.24%

VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.

Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.

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Risk Analysis

VOVV
Mean Return1.141.24
R-squared92.2299.86
Std. Deviation15.6513.75
Alpha-2.71-0.08
Beta1.111.01
Sharpe Ratio0.831.04
Treynor Ratio11.3214.14

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

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a R-squared of 99.86 with a Standard Deviation of 13.75 and a Treynor Ratio of 14.14. Its Alpha is -0.08 while VV’s Beta is 1.01. Furthermore, the fund has a Mean Return of 1.24 and a Sharpe Ratio of 1.04.

VO’s Mean Return is 0.10 points lower than that of VV and its R-squared is 7.64 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than VV. The Alpha and Beta of VO are 2.63 points lower and 0.10 points higher than VV’s Alpha and Beta.

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Performance

Annual Returns

VO vs. VV - Annual Returns

YearVOVV
202018.22%20.99%
201931.04%31.39%
2018-9.21%-4.44%
201719.25%22.03%
201611.23%11.65%
2015-1.34%1.07%
201413.76%13.39%
201335.15%32.65%
201215.98%16.09%
2011-1.96%1.58%
201025.57%15.81%

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 VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% respectively.

Portfolio Growth

VO vs. VV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VO$10,000$40,40414.34%
VV$10,000$42,97014.75%

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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.

VO’s CAGR is 0.41 percentage points lower than that of VV and as a result, would have yielded $2,566 less on a $10,000 investment. Thus, VO performed worse than VV by 0.41% annually.


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