The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Vanguard Small-Cap Index Fund ETF Shares (VB) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and VB is a Vanguard Small Blend fund. So, what’s the difference between VTI and VB? And which fund is better?
The expense ratio of VTI is 0.02 percentage points lower than VB’s (0.03% vs. 0.05%). VTI also has a higher exposure to the technology sector and a lower standard deviation. Overall, VTI has provided higher returns than VB over the past ten years.
In this article, we’ll compare VTI vs. VB. We’ll look at risk metrics and annual returns, as well as at their fund composition and performance. Moreover, I’ll also discuss VTI’s and VB’s industry exposure, portfolio growth, and holdings and examine how these affect their overall returns.
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Summary
| VTI | VB | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Vanguard Small-Cap Index Fund ETF Shares |
| Category | Large Blend | Small Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 1.26T | 137.72B |
| Avg. Return | 14.70% | 14.25% |
| Div. Yield | 1.26% | 1.14% |
| Expense Ratio | 0.03% | 0.05% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.03%.
The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.
VTI’s dividend yield is 0.12% higher than that of VB (1.26% vs. 1.14%). Also, VTI yielded on average 0.44% more per year over the past decade (14.70% vs. 14.25%). The expense ratio of VTI is 0.02 percentage points lower than VB’s (0.03% vs. 0.05%).
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Fund Composition
Industry Exposure
| VTI | VB | |
| Technology | 24.1% | 16.85% |
| Industrials | 9.39% | 16.11% |
| Energy | 2.77% | 3.67% |
| Communication Services | 10.4% | 2.4% |
| Utilities | 2.29% | 2.19% |
| Healthcare | 13.64% | 14.34% |
| Consumer Defensive | 5.77% | 4.14% |
| Real Estate | 3.59% | 9.56% |
| Financial Services | 13.77% | 13.06% |
| Consumer Cyclical | 11.83% | 13.03% |
| Basic Materials | 2.44% | 4.63% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.
VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.
The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.
VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.
VTI is 7.25% more exposed to the Technology sector than VB (24.1% vs 16.85%). VTI’s exposure to Financial Services and Healthcare stocks is 0.71% higher and 0.70% lower respectively (13.77% vs. 13.06% and 13.64% vs. 14.34%). In total, Basic Materials, Energy, and Real Estate also make up 9.06% less of the fund’s holdings compared to VB (8.80% vs. 17.86%).
Holdings
| VTI Holdings | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
| VB Holdings | Weight |
| Charles River Laboratories International Inc | 0.34% |
| Pool Corp | 0.32% |
| Bio-Techne Corp | 0.32% |
| Avantor Inc | 0.32% |
| PerkinElmer Inc | 0.31% |
| Diamondback Energy Inc | 0.31% |
| VICI Properties Inc Ordinary Shares | 0.3% |
| IDEX Corp | 0.3% |
| Entegris Inc | 0.3% |
| Novavax Inc | 0.29% |
VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.
Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.
Performance
Annual Returns
| Year | VTI | VB |
| 2020 | 20.95% | 19.08% |
| 2019 | 30.8% | 27.37% |
| 2018 | -5.13% | -9.3% |
| 2017 | 21.16% | 16.24% |
| 2016 | 12.68% | 18.31% |
| 2015 | 0.4% | -3.65% |
| 2014 | 12.56% | 7.51% |
| 2013 | 33.51% | 37.8% |
| 2012 | 16.41% | 18.22% |
| 2011 | 1.06% | -2.68% |
| 2010 | 17.26% | 27.89% |
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% respectively.
The year 2013 was the strongest year for VB, returning 37.8% on an annual basis. The poorest year for VB in the last ten years was 2018, with a yield of -9.3%. Most years the Vanguard Small-Cap Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2016, when gains were 16.24%, 18.22%, and 18.31% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $42,648 | 14.70% |
| VB | $10,000 | $39,734 | 14.25% |
A $10,000 investment in VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
With a $10,000 investment in VB, the end total would have been $39,734. This equates to a $29,734 profit over 11 years and a compound annual growth rate (CAGR) of 14.25%.
VTI’s CAGR is 0.44 percentage points higher than that of VB and as a result, would have yielded $2,914 more on a $10,000 investment. Thus, VTI outperformed VB by 0.44% annually.
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