The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between VTV and VXF? And which fund is better?
The expense ratio of VTV is 0.02 percentage points lower than VXF’s (0.04% vs. 0.06%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than VXF over the past ten years.
In this article, we’ll compare VTV vs. VXF. We’ll look at risk metrics and fund composition, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss VTV’s and VXF’s performance, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Vanguard Extended Market Index Fund ETF Shares|
|Category||Large Value||Mid-Cap 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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
VTV’s dividend yield is 0.96% higher than that of VXF (2.15% vs. 1.19%). Also, VTV yielded on average 3.40% less per year over the past decade (12.07% vs. 15.47%). The expense ratio of VTV is 0.02 percentage points lower than VXF’s (0.04% vs. 0.06%).
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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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
VTV is 10.25% more exposed to the Financial Services sector than VXF (22.81% vs 12.56%). VTV’s exposure to Healthcare and Industrials stocks is 4.59% higher and 1.30% higher respectively (19.84% vs. 15.25% and 12.61% vs. 11.31%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 8.99% less of the fund’s holdings compared to VXF (12.17% vs. 21.16%).
|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%.
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|CrowdStrike Holdings Inc Class A||0.63%|
|Marvell Technology Inc||0.6%|
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
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The Vanguard Value Index Fund ETF Shares (VTV) has a Standard Deviation of 13.78 with a Treynor Ratio of 11.94 and a Mean Return of 1.05. Its Sharpe Ratio is 0.87 while VTV’s Alpha is -1.92. Furthermore, the fund has a Beta of 0.98 and a R-squared of 92.61.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a R-squared of 85.73 and a Mean Return of 1.24. Its Beta is 1.23 while VXF’s Standard Deviation is 18.04. Furthermore, the fund has a Sharpe Ratio of 0.79 and a Treynor Ratio of 10.92.
VTV’s Mean Return is 0.19 points lower than that of VXF and its R-squared is 6.88 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than VXF. The Alpha and Beta of VTV are 1.34 points higher and 0.25 points lower than VXF’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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% 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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
VTV’s CAGR is 3.40 percentage points lower than that of VXF and as a result, would have yielded $10,967 less on a $10,000 investment. Thus, VTV performed worse than VXF by 3.40% annually.
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