The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Small-Cap Index Fund ETF Shares (VB) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VB is a Vanguard Small Blend fund. So, what’s the difference between VTV and VB? And which fund is better?
The expense ratio of VTV is 0.01 percentage points lower than VB’s (0.04% vs. 0.05%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than VB over the past ten years.
In this article, we’ll compare VTV vs. VB. We’ll look at performance and fund composition, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss VTV’s and VB’s portfolio growth, industry exposure, and holdings and examine how these affect their overall returns.
Summary
| VTV | VB | |
| Name | Vanguard Value Index Fund ETF Shares | Vanguard Small-Cap Index Fund ETF Shares |
| Category | Large Value | Small Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 125.77B | 137.72B |
| Avg. Return | 12.07% | 14.25% |
| Div. Yield | 2.15% | 1.14% |
| Expense Ratio | 0.04% | 0.05% |
The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.
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%.
VTV’s dividend yield is 1.01% higher than that of VB (2.15% vs. 1.14%). Also, VTV yielded on average 2.18% less per year over the past decade (12.07% vs. 14.25%). The expense ratio of VTV is 0.01 percentage points lower than VB’s (0.04% vs. 0.05%).
Fund Composition
Industry Exposure
| VTV | VB | |
| Technology | 7.86% | 16.85% |
| Industrials | 12.61% | 16.11% |
| Energy | 5.59% | 3.67% |
| Communication Services | 5.49% | 2.4% |
| Utilities | 5.37% | 2.19% |
| Healthcare | 19.84% | 14.34% |
| Consumer Defensive | 10.72% | 4.14% |
| Real Estate | 3.01% | 9.56% |
| Financial Services | 22.81% | 13.06% |
| Consumer Cyclical | 3.79% | 13.03% |
| Basic Materials | 2.91% | 4.63% |
The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.
VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.
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%.
VTV is 9.75% more exposed to the Financial Services sector than VB (22.81% vs 13.06%). VTV’s exposure to Healthcare and Industrials stocks is 5.50% higher and 3.50% lower respectively (19.84% vs. 14.34% and 12.61% vs. 16.11%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 12.61% less of the fund’s holdings compared to VB (12.17% vs. 24.78%).
Holdings
| VTV Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.98% |
| JPMorgan Chase & Co | 2.82% |
| Johnson & Johnson | 2.6% |
| UnitedHealth Group Inc | 2.27% |
| Procter & Gamble Co | 1.98% |
| Bank of America Corp | 1.91% |
| Exxon Mobil Corp | 1.6% |
| Comcast Corp Class A | 1.57% |
| Intel Corp | 1.36% |
| Verizon Communications Inc | 1.32% |
VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.
Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.
| 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%.
Risk Analysis
| VTV | VB | |
| Mean Return | 1.05 | 1.15 |
| R-squared | 92.61 | 85.03 |
| Std. Deviation | 13.78 | 17.82 |
| Alpha | -1.92 | -4.02 |
| Beta | 0.98 | 1.21 |
| Sharpe Ratio | 0.87 | 0.74 |
| Treynor Ratio | 11.94 | 10.15 |
The Vanguard Value Index Fund ETF Shares (VTV) has a Mean Return of 1.05 with a Treynor Ratio of 11.94 and a Alpha of -1.92. Its Standard Deviation is 13.78 while VTV’s Beta is 0.98. Furthermore, the fund has a Sharpe Ratio of 0.87 and a R-squared of 92.61.
The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Sharpe Ratio of 0.74 with a Treynor Ratio of 10.15 and a Standard Deviation of 17.82. Its Alpha is -4.02 while VB’s Mean Return is 1.15. Furthermore, the fund has a Beta of 1.21 and a R-squared of 85.03.
VTV’s Mean Return is 0.10 points lower than that of VB and its R-squared is 7.58 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than VB. The Alpha and Beta of VTV are 2.10 points higher and 0.23 points lower than VB’s Alpha and Beta.
Performance
Annual Returns
| Year | VTV | VB |
| 2020 | 2.23% | 19.08% |
| 2019 | 25.85% | 27.37% |
| 2018 | -5.39% | -9.3% |
| 2017 | 17.12% | 16.24% |
| 2016 | 16.88% | 18.31% |
| 2015 | -0.89% | -3.65% |
| 2014 | 13.19% | 7.51% |
| 2013 | 33.03% | 37.8% |
| 2012 | 15.19% | 18.22% |
| 2011 | 1.16% | -2.68% |
| 2010 | 14.45% | 27.89% |
VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% 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 |
| VTV | $10,000 | $33,163 | 12.07% |
| VB | $10,000 | $39,734 | 14.25% |
A $10,000 investment in VTV would have resulted in a final balance of $33,163. This is a profit of $23,163 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.07%.
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%.
VTV’s CAGR is 2.18 percentage points lower than that of VB and as a result, would have yielded $6,571 less on a $10,000 investment. Thus, VTV performed worse than VB by 2.18% annually.
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