The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between VTV and VBK? And which fund is better?
The expense ratio of VTV is 0.03 percentage points lower than VBK’s (0.04% vs. 0.07%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than VBK over the past ten years.
In this article, we’ll compare VTV vs. VBK. We’ll look at holdings and portfolio growth, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss VTV’s and VBK’s performance, fund composition, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Vanguard Small-Cap Growth Index Fund ETF Shares|
|Category||Large Value||Small Growth|
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 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%.
VTV’s dividend yield is 1.70% higher than that of VBK (2.15% vs. 0.45%). Also, VTV yielded on average 4.45% less per year over the past decade (12.07% vs. 16.53%). The expense ratio of VTV is 0.03 percentage points lower than VBK’s (0.04% vs. 0.07%).
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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 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%.
VTV is 18.76% more exposed to the Financial Services sector than VBK (22.81% vs 4.05%). VTV’s exposure to Healthcare and Industrials stocks is 3.40% lower and 0.58% lower respectively (19.84% vs. 23.24% and 12.61% vs. 13.19%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 8.15% less of the fund’s holdings compared to VBK (12.17% vs. 20.32%).
|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%|
|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%.
|Charles River Laboratories International Inc||0.78%|
|Fair Isaac Corp||0.57%|
|Bill.com Holdings Inc Ordinary Shares||0.56%|
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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The Vanguard Value Index Fund ETF Shares (VTV) has a Standard Deviation of 13.78 with a R-squared of 92.61 and a Sharpe Ratio of 0.87. Its Treynor Ratio is 11.94 while VTV’s Beta is 0.98. Furthermore, the fund has a Mean Return of 1.05 and a Alpha of -1.92.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Treynor Ratio of 11.18 with a Beta of 1.18 and a Standard Deviation of 17.95. Its R-squared is 80.56 while VBK’s Sharpe Ratio is 0.78. Furthermore, the fund has a Alpha of -2.81 and a Mean Return of 1.22.
VTV’s Mean Return is 0.17 points lower than that of VBK and its R-squared is 12.05 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than VBK. The Alpha and Beta of VTV are 0.89 points higher and 0.20 points lower than VBK’s Alpha and Beta.
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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 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.
|Fund||Initial Balance||Final Balance||CAGR|
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 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%.
VTV’s CAGR is 4.45 percentage points lower than that of VBK and as a result, would have yielded $15,476 less on a $10,000 investment. Thus, VTV performed worse than VBK by 4.45% annually.
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