The Vanguard S&P 500 ETF (VOO) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and VBR is a Vanguard Small Value fund. So, what’s the difference between VOO and VBR? And which fund is better?
The expense ratio of VOO is 0.04 percentage points lower than VBR’s (0.03% vs. 0.07%). VOO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VOO has provided higher returns than VBR over the past ten years.
In this article, we’ll compare VOO vs. VBR. We’ll look at industry exposure and risk metrics, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss VOO’s and VBR’s performance, annual returns, and fund composition and examine how these affect their overall returns.
Summary
| VOO | VBR | |
| Name | Vanguard S&P 500 ETF | Vanguard Small-Cap Value Index Fund ETF Shares |
| Category | Large Blend | Small Value |
| Issuer | Vanguard | Vanguard |
| AUM | 753.41B | 48.08B |
| Avg. Return | 14.45% | 12.28% |
| Div. Yield | 1.34% | 1.6% |
| Expense Ratio | 0.03% | 0.07% |
The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.
VOO’s dividend yield is 0.26% lower than that of VBR (1.34% vs. 1.6%). Also, VOO yielded on average 2.17% more per year over the past decade (14.45% vs. 12.28%). The expense ratio of VOO is 0.04 percentage points lower than VBR’s (0.03% vs. 0.07%).
Fund Composition
Industry Exposure
| VOO | VBR | |
| Technology | 24.24% | 8.39% |
| Industrials | 8.86% | 18.44% |
| Energy | 2.84% | 5.15% |
| Communication Services | 11.14% | 1.77% |
| Utilities | 2.43% | 3.65% |
| Healthcare | 13.1% | 7.16% |
| Consumer Defensive | 6.32% | 4.36% |
| Real Estate | 2.58% | 10.92% |
| Financial Services | 14.2% | 20.04% |
| Consumer Cyclical | 12.01% | 13.82% |
| Basic Materials | 2.27% | 6.31% |
The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.
VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.
VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.
VOO is 15.85% more exposed to the Technology sector than VBR (24.24% vs 8.39%). VOO’s exposure to Financial Services and Healthcare stocks is 5.84% lower and 5.94% higher respectively (14.2% vs. 20.04% and 13.1% vs. 7.16%). In total, Utilities, Real Estate, and Energy also make up 11.87% less of the fund’s holdings compared to VBR (7.85% vs. 19.72%).
Holdings
| VOO Holdings | Weight |
| Apple Inc | 5.92% |
| Microsoft Corp | 5.62% |
| Amazon.com Inc | 4.06% |
| Facebook Inc Class A | 2.29% |
| Alphabet Inc Class A | 2.02% |
| Alphabet Inc Class C | 1.97% |
| Tesla Inc | 1.44% |
| Berkshire Hathaway Inc Class B | 1.44% |
| NVIDIA Corp | 1.37% |
| JPMorgan Chase & Co | 1.3% |
VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.
Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.
| VBR Holdings | Weight |
| Diamondback Energy Inc | 0.55% |
| VICI Properties Inc Ordinary Shares | 0.54% |
| IDEX Corp | 0.54% |
| Nuance Communications Inc | 0.5% |
| Molina Healthcare Inc | 0.48% |
| Signature Bank | 0.46% |
| Novavax Inc | 0.44% |
| Howmet Aerospace Inc | 0.44% |
| Apollo Global Management Inc Class A | 0.42% |
| Brown & Brown Inc | 0.41% |
VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.
Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.
Performance
Annual Returns
| Year | VOO | VBR |
| 2020 | 18.35% | 5.82% |
| 2019 | 31.46% | 22.76% |
| 2018 | -4.42% | -12.22% |
| 2017 | 21.78% | 11.79% |
| 2016 | 11.93% | 24.8% |
| 2015 | 1.35% | -4.67% |
| 2014 | 13.63% | 10.55% |
| 2013 | 32.33% | 36.57% |
| 2012 | 15.98% | 18.78% |
| 2011 | 2.09% | -4.05% |
| 2010 | 0.0% | 24.97% |
VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.
The year 2013 was the strongest year for VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VOO | $10,000 | $36,575 | 14.45% |
| VBR | $10,000 | $26,095 | 12.28% |
A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.
With a $10,000 investment in VBR, the end total would have been $26,095. This equates to a $16,095 profit over 10 years and a compound annual growth rate (CAGR) of 12.28%.
VOO’s CAGR is 2.17 percentage points higher than that of VBR and as a result, would have yielded $10,480 more on a $10,000 investment. Thus, VOO outperformed VBR by 2.17% annually.
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