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VTV vs. VBR: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VBR is a Vanguard Small Value fund. So, what’s the difference between VTV and VBR? And which fund is better?

The expense ratio of VTV is 0.03 percentage points lower than VBR’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 VBR over the past ten years.

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

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Summary

VTVVBR
NameVanguard Value Index Fund ETF SharesVanguard Small-Cap Value Index Fund ETF Shares
CategoryLarge ValueSmall Value
IssuerVanguardVanguard
AUM125.77B48.08B
Avg. Return12.07%12.28%
Div. Yield2.15%1.6%
Expense Ratio0.04%0.07%

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 Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.

VTV’s dividend yield is 0.55% higher than that of VBR (2.15% vs. 1.6%). Also, VTV yielded on average 0.21% less per year over the past decade (12.07% vs. 12.28%). The expense ratio of VTV is 0.03 percentage points lower than VBR’s (0.04% vs. 0.07%).

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Fund Composition

Industry Exposure

VTV vs. VBR - Industry Exposure

VTVVBR
Technology7.86%8.39%
Industrials12.61%18.44%
Energy5.59%5.15%
Communication Services5.49%1.77%
Utilities5.37%3.65%
Healthcare19.84%7.16%
Consumer Defensive10.72%4.36%
Real Estate3.01%10.92%
Financial Services22.81%20.04%
Consumer Cyclical3.79%13.82%
Basic Materials2.91%6.31%

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 Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.

VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.

VTV is 2.77% more exposed to the Financial Services sector than VBR (22.81% vs 20.04%). VTV’s exposure to Healthcare and Industrials stocks is 12.68% higher and 5.83% lower respectively (19.84% vs. 7.16% and 12.61% vs. 18.44%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 16.22% less of the fund’s holdings compared to VBR (12.17% vs. 28.39%).

Holdings

VTV - Holdings

VTV HoldingsWeight
Berkshire Hathaway Inc Class B2.98%
JPMorgan Chase & Co2.82%
Johnson & Johnson2.6%
UnitedHealth Group Inc2.27%
Procter & Gamble Co1.98%
Bank of America Corp1.91%
Exxon Mobil Corp1.6%
Comcast Corp Class A1.57%
Intel Corp1.36%
Verizon Communications Inc1.32%

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%.

VBR - Holdings

VBR HoldingsWeight
Diamondback Energy Inc0.55%
VICI Properties Inc Ordinary Shares0.54%
IDEX Corp0.54%
Nuance Communications Inc0.5%
Molina Healthcare Inc0.48%
Signature Bank0.46%
Novavax Inc0.44%
Howmet Aerospace Inc0.44%
Apollo Global Management Inc Class A0.42%
Brown & Brown Inc0.41%

VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.

Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.

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Risk Analysis

VTVVBR
Mean Return1.051.08
R-squared92.6182.2
Std. Deviation13.7818.37
Alpha-1.92-5.09
Beta0.981.23
Sharpe Ratio0.870.67
Treynor Ratio11.949.15

The Vanguard Value Index Fund ETF Shares (VTV) has a Sharpe Ratio of 0.87 with a Alpha of -1.92 and a Standard Deviation of 13.78. Its Treynor Ratio is 11.94 while VTV’s R-squared is 92.61. Furthermore, the fund has a Mean Return of 1.05 and a Beta of 0.98.

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a R-squared of 82.2 with a Standard Deviation of 18.37 and a Mean Return of 1.08. Its Beta is 1.23 while VBR’s Sharpe Ratio is 0.67. Furthermore, the fund has a Treynor Ratio of 9.15 and a Alpha of -5.09.

VTV’s Mean Return is 0.03 points lower than that of VBR and its R-squared is 10.41 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than VBR. The Alpha and Beta of VTV are 3.17 points higher and 0.25 points lower than VBR’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. VBR - Annual Returns

YearVTVVBR
20202.23%5.82%
201925.85%22.76%
2018-5.39%-12.22%
201717.12%11.79%
201616.88%24.8%
2015-0.89%-4.67%
201413.19%10.55%
201333.03%36.57%
201215.19%18.78%
20111.16%-4.05%
201014.45%24.97%

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 VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.

Portfolio Growth

VTV vs. VBR - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTV$10,000$33,16312.07%
VBR$10,000$32,61112.28%

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 VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.

VTV’s CAGR is 0.21 percentage points lower than that of VBR and as a result, would have yielded $552 more on a $10,000 investment. Thus, VTV performed worse than VBR by 0.21% annually.


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