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VTI vs. VB: What’s The Difference?

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

VTIVB
NameVanguard Total Stock Market Index Fund ETF SharesVanguard Small-Cap Index Fund ETF Shares
CategoryLarge BlendSmall Blend
IssuerVanguardVanguard
AUM1.26T137.72B
Avg. Return14.70%14.25%
Div. Yield1.26%1.14%
Expense Ratio0.03%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 vs. VB - Industry Exposure

VTIVB
Technology24.1%16.85%
Industrials9.39%16.11%
Energy2.77%3.67%
Communication Services10.4%2.4%
Utilities2.29%2.19%
Healthcare13.64%14.34%
Consumer Defensive5.77%4.14%
Real Estate3.59%9.56%
Financial Services13.77%13.06%
Consumer Cyclical11.83%13.03%
Basic Materials2.44%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

VTI HoldingsWeight
Apple Inc4.9%
Microsoft Corp4.6%
Amazon.com Inc3.33%
Facebook Inc Class A1.88%
Alphabet Inc Class A1.66%
Alphabet Inc Class C1.56%
Tesla Inc1.18%
Berkshire Hathaway Inc Class B1.09%
NVIDIA Corp1.07%
JPMorgan Chase & Co1.06%

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

VB HoldingsWeight
Charles River Laboratories International Inc0.34%
Pool Corp0.32%
Bio-Techne Corp0.32%
Avantor Inc0.32%
PerkinElmer Inc0.31%
Diamondback Energy Inc0.31%
VICI Properties Inc Ordinary Shares0.3%
IDEX Corp0.3%
Entegris Inc0.3%
Novavax Inc0.29%

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%.

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Performance

Annual Returns

VTI vs. VB - Annual Returns

YearVTIVB
202020.95%19.08%
201930.8%27.37%
2018-5.13%-9.3%
201721.16%16.24%
201612.68%18.31%
20150.4%-3.65%
201412.56%7.51%
201333.51%37.8%
201216.41%18.22%
20111.06%-2.68%
201017.26%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

VTI vs. VB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTI$10,000$42,64814.70%
VB$10,000$39,73414.25%

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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