The Vanguard Growth Index Fund ETF Shares (VUG) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between VUG and VXF? And which fund is better?
The expense ratio of VUG is 0.02 percentage points lower than VXF’s (0.04% vs. 0.06%). VUG also has a higher exposure to the technology sector and a lower standard deviation. Overall, VUG has provided higher returns than VXF over the past ten years.
In this article, we’ll compare VUG vs. VXF. We’ll look at holdings and portfolio growth, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss VUG’s and VXF’s fund composition, performance, and annual returns and examine how these affect their overall returns.
Summary
| VUG | VXF | |
| Name | Vanguard Growth Index Fund ETF Shares | Vanguard Extended Market Index Fund ETF Shares |
| Category | Large Growth | Mid-Cap Growth |
| Issuer | Vanguard | Vanguard |
| AUM | 165.53B | 114.53B |
| Avg. Return | 17.58% | 15.47% |
| Div. Yield | 0.57% | 1.19% |
| Expense Ratio | 0.04% | 0.06% |
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 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%.
VUG’s dividend yield is 0.62% lower than that of VXF (0.57% vs. 1.19%). Also, VUG yielded on average 2.11% more per year over the past decade (17.58% vs. 15.47%). The expense ratio of VUG is 0.02 percentage points lower than VXF’s (0.04% vs. 0.06%).
Fund Composition
Industry Exposure
| VUG | VXF | |
| Technology | 39.05% | 23.61% |
| Industrials | 5.13% | 11.31% |
| Energy | 0.32% | 2.46% |
| Communication Services | 16.49% | 7.29% |
| Utilities | 0.0% | 1.65% |
| Healthcare | 8.09% | 15.25% |
| Consumer Defensive | 2.41% | 3.09% |
| Real Estate | 2.46% | 8.16% |
| Financial Services | 6.75% | 12.56% |
| Consumer Cyclical | 17.78% | 11.35% |
| Basic Materials | 1.52% | 3.26% |
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 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%.
VUG is 15.44% more exposed to the Technology sector than VXF (39.05% vs 23.61%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 6.43% higher and 9.20% higher respectively (17.78% vs. 11.35% and 16.49% vs. 7.29%). In total, Energy, Basic Materials, and Consumer Defensive also make up 4.56% less of the fund’s holdings compared to VXF (4.25% vs. 8.81%).
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%.
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| 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%.
Risk Analysis
| VUG | VXF | |
| Mean Return | 1.44 | 1.24 |
| R-squared | 92.48 | 85.73 |
| Std. Deviation | 14.76 | 18.04 |
| Alpha | 1.81 | -3.26 |
| Beta | 1.04 | 1.23 |
| Sharpe Ratio | 1.13 | 0.79 |
| Treynor Ratio | 16.13 | 10.92 |
The Vanguard Growth Index Fund ETF Shares (VUG) has a Alpha of 1.81 with a Beta of 1.04 and a Treynor Ratio of 16.13. Its R-squared is 92.48 while VUG’s Mean Return is 1.44. Furthermore, the fund has a Standard Deviation of 14.76 and a Sharpe Ratio of 1.13.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a Mean Return of 1.24 and a Beta of 1.23. Its R-squared is 85.73 while VXF’s Treynor Ratio is 10.92. Furthermore, the fund has a Standard Deviation of 18.04 and a Sharpe Ratio of 0.79.
VUG’s Mean Return is 0.20 points higher than that of VXF and its R-squared is 6.75 points higher. With a Standard Deviation of 14.76, VUG is slightly less volatile than VXF. The Alpha and Beta of VUG are 5.07 points higher and 0.19 points lower than VXF’s Alpha and Beta.
Performance
Annual Returns
| Year | VUG | VXF |
| 2020 | 40.16% | 32.19% |
| 2019 | 37.26% | 28.04% |
| 2018 | -3.32% | -9.37% |
| 2017 | 27.8% | 18.1% |
| 2016 | 6.13% | 16.16% |
| 2015 | 3.32% | -3.26% |
| 2014 | 13.62% | 7.55% |
| 2013 | 32.38% | 38.37% |
| 2012 | 17.03% | 18.48% |
| 2011 | 1.87% | -3.61% |
| 2010 | 17.11% | 27.55% |
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 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.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VUG | $10,000 | $54,735 | 17.58% |
| VXF | $10,000 | $44,130 | 15.47% |
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 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%.
VUG’s CAGR is 2.11 percentage points higher than that of VXF and as a result, would have yielded $10,605 more on a $10,000 investment. Thus, VUG outperformed VXF by 2.11% annually.
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