The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. VOE is a Vanguard Mid-Cap Value fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between VOE and BIV? And which fund is better?
The expense ratio of VOE is 0.02 percentage points higher than BIV’s (0.07% vs. 0.05%). VOE also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, VOE has provided higher returns than BIV over the past 11 years.
In this article, we’ll compare VOE vs. BIV. We’ll look at holdings and industry exposure, as well as at their fund composition and portfolio growth. Moreover, I’ll also discuss VOE’s and BIV’s performance, annual returns, and risk metrics and examine how these affect their overall returns.
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Summary
| VOE | BIV | |
| Name | Vanguard Mid-Cap Value Index Fund ETF Shares | Vanguard Intermediate-Term Bond Index Fund ETF Shares |
| Category | Mid-Cap Value | Intermediate-Term Bond |
| Issuer | Vanguard | Vanguard |
| AUM | 26.78B | 39.05B |
| Avg. Return | 12.52% | 5.31% |
| Div. Yield | 1.87% | 2.06% |
| Expense Ratio | 0.07% | 0.05% |
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%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
VOE’s dividend yield is 0.19% lower than that of BIV (1.87% vs. 2.06%). Also, VOE yielded on average 7.21% more per year over the past decade (12.52% vs. 5.31%). The expense ratio of VOE is 0.02 percentage points higher than BIV’s (0.07% vs. 0.05%).
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Fund Composition
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%.
| BIV Bond Sectors | Weight |
| AAA | 54.51% |
| BBB | 25.24% |
| A | 16.97% |
| AA | 3.1% |
| Others | 0.15% |
| Below B | 0.03% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| VOE | BIV | |
| Mean Return | 1.05 | 0.35 |
| R-squared | 88.76 | 95.12 |
| Std. Deviation | 15.98 | 4.09 |
| Alpha | -3.77 | -0.07 |
| Beta | 1.11 | 1.33 |
| Sharpe Ratio | 0.75 | 0.89 |
| Treynor Ratio | 10.19 | 2.72 |
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Mean Return of 1.05 with a Alpha of -3.77 and a Standard Deviation of 15.98. Its R-squared is 88.76 while VOE’s Beta is 1.11. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Treynor Ratio of 10.19.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Alpha of -0.07 with a Treynor Ratio of 2.72 and a R-squared of 95.12. Its Sharpe Ratio is 0.89 while BIV’s Standard Deviation is 4.09. Furthermore, the fund has a Mean Return of 0.35 and a Beta of 1.33.
VOE’s Mean Return is 0.70 points higher than that of BIV and its R-squared is 6.36 points lower. With a Standard Deviation of 15.98, VOE is slightly more volatile than BIV. The Alpha and Beta of VOE are 3.70 points lower and 0.22 points lower than BIV’s Alpha and Beta.
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Performance
Annual Returns
| Year | VOE | BIV |
| 2020 | 2.5% | 9.71% |
| 2019 | 27.98% | 10.19% |
| 2018 | -12.41% | -0.09% |
| 2017 | 17.05% | 3.8% |
| 2016 | 15.26% | 2.86% |
| 2015 | -1.8% | 1.23% |
| 2014 | 13.98% | 7.0% |
| 2013 | 37.65% | -3.44% |
| 2012 | 16.04% | 7.02% |
| 2011 | -0.32% | 10.62% |
| 2010 | 21.83% | 9.55% |
VOE had its best year in 2013 with an annual return of 37.65%. VOE’s worst year over the past decade yielded -12.41% and occurred in 2018. In most years the Vanguard Mid-Cap Value Index Fund ETF Shares provided moderate returns such as in 2014, 2016, and 2012 where annual returns amounted to 13.98%, 15.26%, and 16.04% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VOE | $10,000 | $33,655 | 12.52% |
| BIV | $10,000 | $17,492 | 5.31% |
A $10,000 investment in VOE would have resulted in a final balance of $33,655. This is a profit of $23,655 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.52%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
VOE’s CAGR is 7.21 percentage points higher than that of BIV and as a result, would have yielded $16,163 more on a $10,000 investment. Thus, VOE outperformed BIV by 7.21% annually.
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