The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between VO and VXF? And which fund is better?
The expense ratio of VO is 0.02 percentage points lower than VXF’s (0.04% vs. 0.06%). VO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VO has provided lower returns than VXF over the past ten years.
In this article, we’ll compare VO vs. VXF. We’ll look at annual returns and portfolio growth, as well as at their risk metrics and performance. Moreover, I’ll also discuss VO’s and VXF’s holdings, industry exposure, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Mid-Cap Index Fund ETF Shares||Vanguard Extended Market Index Fund ETF Shares|
|Category||Mid-Cap Blend||Mid-Cap Growth|
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 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%.
VO’s dividend yield is 0.04% higher than that of VXF (1.23% vs. 1.19%). Also, VO yielded on average 1.14% less per year over the past decade (14.34% vs. 15.47%). The expense ratio of VO is 0.02 percentage points lower than VXF’s (0.04% vs. 0.06%).
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 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%.
VO is 1.60% less exposed to the Technology sector than VXF (22.01% vs 23.61%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 2.22% lower and 0.77% higher respectively (13.03% vs. 15.25% and 12.12% vs. 11.35%). In total, Basic Materials, Energy, and Utilities also make up 4.93% more of the fund’s holdings compared to VXF (12.30% vs. 7.37%).
|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%.
|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%.
The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Sharpe Ratio of 0.83 with a Treynor Ratio of 11.32 and a R-squared of 92.22. Its Standard Deviation is 15.65 while VO’s Beta is 1.11. Furthermore, the fund has a Mean Return of 1.14 and a Alpha of -2.71.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Sharpe Ratio of 0.79 with a Treynor Ratio of 10.92 and a Mean Return of 1.24. Its R-squared is 85.73 while VXF’s Beta is 1.23. Furthermore, the fund has a Alpha of -3.26 and a Standard Deviation of 18.04.
VO’s Mean Return is 0.10 points lower than that of VXF and its R-squared is 6.49 points higher. With a Standard Deviation of 15.65, VO is slightly less volatile than VXF. The Alpha and Beta of VO are 0.55 points higher and 0.12 points lower than VXF’s Alpha and Beta.
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 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 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 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%.
VO’s CAGR is 1.14 percentage points lower than that of VXF and as a result, would have yielded $3,726 less on a $10,000 investment. Thus, VO performed worse than VXF by 1.14% annually.
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