VT vs. VOE: What’s The Difference?

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

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

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

Summary

VT VOE
Name Vanguard Total World Stock Index Fund ETF Shares Vanguard Mid-Cap Value Index Fund ETF Shares
Category N/A Mid-Cap Value
Issuer Vanguard Vanguard
AUM 30.44B 26.78B
Avg. Return 10.42% 12.52%
Div. Yield 1.65% 1.87%
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 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%.

VT’s dividend yield is 0.22% lower than that of VOE (1.65% vs. 1.87%). Also, VT yielded on average 2.11% less per year over the past decade (10.42% vs. 12.52%). The expense ratio of VT is 0.01 percentage points higher than VOE’s (0.08% vs. 0.07%).

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Fund Composition

Industry Exposure

VT vs. VOE - Industry Exposure

VT VOE
Technology 19.63% 9.85%
Industrials 10.7% 9.4%
Energy 3.48% 5.69%
Communication Services 9.02% 5.27%
Utilities 2.6% 10.93%
Healthcare 11.58% 7.04%
Consumer Defensive 6.71% 4.85%
Real Estate 3.64% 11.48%
Financial Services 15.36% 18.26%
Consumer Cyclical 12.32% 11.8%
Basic Materials 4.97% 5.44%

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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

VT is 9.78% more exposed to the Technology sector than VOE (19.63% vs 9.85%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 2.90% lower and 0.52% higher respectively (15.36% vs. 18.26% and 12.32% vs. 11.8%). In total, Energy, Real Estate, and Basic Materials also make up 10.52% less of the fund’s holdings compared to VOE (12.09% vs. 22.61%).

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%.

VOE - 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%.

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Risk Analysis

VT VOE
Mean Return 0.9 1.05
R-squared 99.35 88.76
Std. Deviation 14.19 15.98
Alpha 0.2 -3.77
Beta 1.01 1.11
Sharpe Ratio 0.71 0.75
Treynor Ratio 9.5 10.19

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

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 R-squared of 88.76. Its Beta is 1.11 while VOE’s Treynor Ratio is 10.19. Furthermore, the fund has a Standard Deviation of 15.98 and a Sharpe Ratio of 0.75.

VT’s Mean Return is 0.15 points lower than that of VOE and its R-squared is 10.59 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than VOE. The Alpha and Beta of VT are 3.97 points higher and 0.10 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

VT vs. VOE - Annual Returns

Year VT VOE
2020 16.74% 2.5%
2019 26.8% 27.98%
2018 -9.67% -12.41%
2017 24.19% 17.05%
2016 8.77% 15.26%
2015 -1.88% -1.8%
2014 3.97% 13.98%
2013 22.98% 37.65%
2012 17.33% 16.04%
2011 -7.71% -0.32%
2010 13.05% 21.83%

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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

VT vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VT $10,000 $27,739 10.42%
VOE $10,000 $33,655 12.52%

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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.

VT’s CAGR is 2.11 percentage points lower than that of VOE and as a result, would have yielded $5,916 less on a $10,000 investment. Thus, VT performed worse than VOE by 2.11% annually.


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