The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between VTV and VGK? And which fund is better?
The expense ratio of VTV is 0.04 percentage points lower than VGK’s (0.04% vs. 0.08%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided higher returns than VGK over the past ten years.
In this article, we’ll compare VTV vs. VGK. We’ll look at performance and annual returns, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss VTV’s and VGK’s risk metrics, fund composition, and holdings and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Vanguard FTSE Europe Index Fund ETF Shares|
|Category||Large Value||Europe Stock|
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 FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
VTV’s dividend yield is 0.37% lower than that of VGK (2.15% vs. 2.52%). Also, VTV yielded on average 5.40% more per year over the past decade (12.07% vs. 6.68%). The expense ratio of VTV is 0.04 percentage points lower than VGK’s (0.04% vs. 0.08%).
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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 FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
VTV is 6.96% more exposed to the Financial Services sector than VGK (22.81% vs 15.85%). VTV’s exposure to Healthcare and Industrials stocks is 6.08% higher and 2.97% lower respectively (19.84% vs. 13.76% and 12.61% vs. 15.58%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 5.89% less of the fund’s holdings compared to VGK (12.17% vs. 18.06%).
|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%.
|ASML Holding NV||2.2%|
|Roche Holding AG||2.13%|
|LVMH Moet Hennessy Louis Vuitton SE||1.58%|
|Novo Nordisk A/S B||1.09%|
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
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The Vanguard Value Index Fund ETF Shares (VTV) has a R-squared of 92.61 with a Treynor Ratio of 11.94 and a Mean Return of 1.05. Its Standard Deviation is 13.78 while VTV’s Sharpe Ratio is 0.87. Furthermore, the fund has a Alpha of -1.92 and a Beta of 0.98.
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Sharpe Ratio of 0.4 with a Beta of 1.06 and a Mean Return of 0.61. Its Alpha is 0.45 while VGK’s Standard Deviation is 16.65. Furthermore, the fund has a R-squared of 92.76 and a Treynor Ratio of 5.12.
VTV’s Mean Return is 0.44 points higher than that of VGK and its R-squared is 0.15 points lower. With a Standard Deviation of 13.78, VTV is slightly less volatile than VGK. The Alpha and Beta of VTV are 2.37 points lower and 0.08 points lower than VGK’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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% 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 VGK, the end total would have been $18,350. This equates to a $8,350 profit over 11 years and a compound annual growth rate (CAGR) of 6.68%.
VTV’s CAGR is 5.40 percentage points higher than that of VGK and as a result, would have yielded $14,813 more on a $10,000 investment. Thus, VTV outperformed VGK by 5.40% annually.
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