VT vs. VBK: What’s The Difference?

The Vanguard Total World Stock Index Fund ETF Shares (VT) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between VT and VBK? And which fund is better?

The expense ratio of VT is 0.01 percentage points higher than VBK’s (0.08% vs. 0.07%). VT also has a lower exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than VBK over the past 11 years.

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

Summary

VT VBK
Name Vanguard Total World Stock Index Fund ETF Shares Vanguard Small-Cap Growth Index Fund ETF Shares
Category N/A Small Growth
Issuer Vanguard Vanguard
AUM 30.44B 37.89B
Avg. Return 10.42% 16.53%
Div. Yield 1.65% 0.45%
Expense Ratio 0.08% 0.07%

The Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.

VT’s dividend yield is 1.20% higher than that of VBK (1.65% vs. 0.45%). Also, VT yielded on average 6.11% less per year over the past decade (10.42% vs. 16.53%). The expense ratio of VT is 0.01 percentage points higher than VBK’s (0.08% vs. 0.07%).

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Fund Composition

Industry Exposure

VT vs. VBK - Industry Exposure

VT VBK
Technology 19.63% 27.87%
Industrials 10.7% 13.19%
Energy 3.48% 1.77%
Communication Services 9.02% 3.24%
Utilities 2.6% 0.32%
Healthcare 11.58% 23.24%
Consumer Defensive 6.71% 3.83%
Real Estate 3.64% 7.87%
Financial Services 15.36% 4.05%
Consumer Cyclical 12.32% 12.13%
Basic Materials 4.97% 2.49%

The Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.

VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.

VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.

VT is 8.24% less exposed to the Technology sector than VBK (19.63% vs 27.87%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 11.31% higher and 0.19% higher respectively (15.36% vs. 4.05% and 12.32% vs. 12.13%). In total, Energy, Real Estate, and Basic Materials also make up 0.04% less of the fund’s holdings compared to VBK (12.09% vs. 12.13%).

Holdings

VT - Holdings

VT Holdings Weight
Apple Inc 2.85%
Microsoft Corp 2.71%
Amazon.com Inc 1.98%
Facebook Inc Class A 1.1%
Alphabet Inc Class A 0.97%
Alphabet Inc Class C 0.95%
Tesla Inc 0.7%
NVIDIA Corp 0.64%
JPMorgan Chase & Co 0.62%
Tencent Holdings Ltd 0.6%

VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.

Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.

VBK - Holdings

VBK Holdings Weight
Charles River Laboratories International Inc 0.78%
Pool Corp 0.73%
Bio-Techne Corp 0.73%
Avantor Inc 0.73%
PerkinElmer Inc 0.72%
Entegris Inc 0.7%
PTC Inc 0.62%
Fair Isaac Corp 0.57%
Bill.com Holdings Inc Ordinary Shares 0.56%
Avalara Inc 0.55%

VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.

Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.

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Risk Analysis

VT VBK
Mean Return 0.9 1.22
R-squared 99.35 80.56
Std. Deviation 14.19 17.95
Alpha 0.2 -2.81
Beta 1.01 1.18
Sharpe Ratio 0.71 0.78
Treynor Ratio 9.5 11.18

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Alpha of 0.2 with a Mean Return of 0.9 and a R-squared of 99.35. Its Beta is 1.01 while VT’s Sharpe Ratio is 0.71. Furthermore, the fund has a Standard Deviation of 14.19 and a Treynor Ratio of 9.5.

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Beta of 1.18 with a Mean Return of 1.22 and a Alpha of -2.81. Its Treynor Ratio is 11.18 while VBK’s R-squared is 80.56. Furthermore, the fund has a Standard Deviation of 17.95 and a Sharpe Ratio of 0.78.

VT’s Mean Return is 0.32 points lower than that of VBK and its R-squared is 18.79 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than VBK. The Alpha and Beta of VT are 3.01 points higher and 0.17 points lower than VBK’s Alpha and Beta.

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Performance

Annual Returns

VT vs. VBK - Annual Returns

Year VT VBK
2020 16.74% 35.29%
2019 26.8% 32.75%
2018 -9.67% -5.68%
2017 24.19% 21.9%
2016 8.77% 10.74%
2015 -1.88% -2.51%
2014 3.97% 4.02%
2013 22.98% 38.18%
2012 17.33% 17.67%
2011 -7.71% -1.43%
2010 13.05% 30.87%

VT had its best year in 2019 with an annual return of 26.8%. VT’s worst year over the past decade yielded -9.67% and occurred in 2018. In most years the Vanguard Total World Stock Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 8.77%, 13.05%, and 16.74% respectively.

The year 2013 was the strongest year for VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.

Portfolio Growth

VT vs. VBK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VT $10,000 $27,739 10.42%
VBK $10,000 $48,639 16.53%

A $10,000 investment in VT would have resulted in a final balance of $27,739. This is a profit of $17,739 over 11 years and amounts to a compound annual growth rate (CAGR) of 10.42%.

With a $10,000 investment in VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.

VT’s CAGR is 6.11 percentage points lower than that of VBK and as a result, would have yielded $20,900 less on a $10,000 investment. Thus, VT performed worse than VBK by 6.11% annually.


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