The Vanguard Growth Index Fund ETF Shares (VUG) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and VV is a Vanguard Large Blend fund. So, what’s the difference between VUG and VV? And which fund is better?
VUG and VV have the same expense ratio: 0.04%. VUG also has a higher exposure to the technology sector and a higher standard deviation. Overall, VUG has provided higher returns than VV over the past ten years.
In this article, we’ll compare VUG vs. VV. We’ll look at portfolio growth and holdings, as well as at their industry exposure and performance. Moreover, I’ll also discuss VUG’s and VV’s risk metrics, annual returns, and fund composition and examine how these affect their overall returns.
Summary
| VUG | VV | |
| Name | Vanguard Growth Index Fund ETF Shares | Vanguard Large-Cap Index Fund ETF Shares |
| Category | Large Growth | Large Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 165.53B | 37.65B |
| Avg. Return | 17.58% | 14.75% |
| Div. Yield | 0.57% | 1.26% |
| Expense Ratio | 0.04% | 0.04% |
The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.
The Vanguard Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.
VUG’s dividend yield is 0.69% lower than that of VV (0.57% vs. 1.26%). Also, VUG yielded on average 2.83% more per year over the past decade (17.58% vs. 14.75%). VUG and VV have the same expense ratio: 0.04%.
Fund Composition
Industry Exposure
| VUG | VV | |
| Technology | 39.05% | 25.38% |
| Industrials | 5.13% | 8.39% |
| Energy | 0.32% | 2.62% |
| Communication Services | 16.49% | 11.68% |
| Utilities | 0.0% | 2.35% |
| Healthcare | 8.09% | 13.22% |
| Consumer Defensive | 2.41% | 6.06% |
| Real Estate | 2.46% | 2.7% |
| Financial Services | 6.75% | 13.82% |
| Consumer Cyclical | 17.78% | 11.65% |
| Basic Materials | 1.52% | 2.13% |
The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.
VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.
VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.
VUG is 13.67% more exposed to the Technology sector than VV (39.05% vs 25.38%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 6.13% higher and 4.81% higher respectively (17.78% vs. 11.65% and 16.49% vs. 11.68%). In total, Energy, Basic Materials, and Consumer Defensive also make up 6.56% less of the fund’s holdings compared to VV (4.25% vs. 10.81%).
Holdings
| VUG Holdings | Weight |
| Apple Inc | 10.13% |
| Microsoft Corp | 9.52% |
| Amazon.com Inc | 6.88% |
| Facebook Inc Class A | 3.89% |
| Alphabet Inc Class A | 3.43% |
| Alphabet Inc Class C | 3.22% |
| Tesla Inc | 2.44% |
| NVIDIA Corp | 2.21% |
| Visa Inc Class A | 1.78% |
| PayPal Holdings Inc | 1.6% |
VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.
Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.
| VV Holdings | Weight |
| Apple Inc | 5.7% |
| Microsoft Corp | 5.35% |
| Amazon.com Inc | 3.87% |
| Facebook Inc Class A | 2.19% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.81% |
| Tesla Inc | 1.37% |
| Berkshire Hathaway Inc Class B | 1.3% |
| NVIDIA Corp | 1.24% |
| JPMorgan Chase & Co | 1.24% |
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
Risk Analysis
| VUG | VV | |
| Mean Return | 1.44 | 1.24 |
| R-squared | 92.48 | 99.86 |
| Std. Deviation | 14.76 | 13.75 |
| Alpha | 1.81 | -0.08 |
| Beta | 1.04 | 1.01 |
| Sharpe Ratio | 1.13 | 1.04 |
| Treynor Ratio | 16.13 | 14.14 |
The Vanguard Growth Index Fund ETF Shares (VUG) has a Sharpe Ratio of 1.13 with a Standard Deviation of 14.76 and a R-squared of 92.48. Its Mean Return is 1.44 while VUG’s Beta is 1.04. Furthermore, the fund has a Treynor Ratio of 16.13 and a Alpha of 1.81.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Alpha of -0.08 with a Treynor Ratio of 14.14 and a Sharpe Ratio of 1.04. Its R-squared is 99.86 while VV’s Mean Return is 1.24. Furthermore, the fund has a Beta of 1.01 and a Standard Deviation of 13.75.
VUG’s Mean Return is 0.20 points higher than that of VV and its R-squared is 7.38 points lower. With a Standard Deviation of 14.76, VUG is slightly more volatile than VV. The Alpha and Beta of VUG are 1.89 points higher and 0.03 points higher than VV’s Alpha and Beta.
Performance
Annual Returns
| Year | VUG | VV |
| 2020 | 40.16% | 20.99% |
| 2019 | 37.26% | 31.39% |
| 2018 | -3.32% | -4.44% |
| 2017 | 27.8% | 22.03% |
| 2016 | 6.13% | 11.65% |
| 2015 | 3.32% | 1.07% |
| 2014 | 13.62% | 13.39% |
| 2013 | 32.38% | 32.65% |
| 2012 | 17.03% | 16.09% |
| 2011 | 1.87% | 1.58% |
| 2010 | 17.11% | 15.81% |
VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% respectively.
The year 2013 was the strongest year for VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VUG | $10,000 | $54,735 | 17.58% |
| VV | $10,000 | $42,970 | 14.75% |
A $10,000 investment in VUG would have resulted in a final balance of $54,735. This is a profit of $44,735 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.58%.
With a $10,000 investment in VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.
VUG’s CAGR is 2.83 percentage points higher than that of VV and as a result, would have yielded $11,765 more on a $10,000 investment. Thus, VUG outperformed VV by 2.83% annually.
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