VV vs. VBR: What’s The Difference?

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

The expense ratio of VV is 0.03 percentage points lower than VBR’s (0.04% vs. 0.07%). VV also has a higher exposure to the technology sector and a lower standard deviation. Overall, VV has provided higher returns than VBR over the past 11 years.

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

Summary

VV VBR
Name Vanguard Large-Cap Index Fund ETF Shares Vanguard Small-Cap Value Index Fund ETF Shares
Category Large Blend Small Value
Issuer Vanguard Vanguard
AUM 37.65B 48.08B
Avg. Return 14.75% 12.28%
Div. Yield 1.26% 1.6%
Expense Ratio 0.04% 0.07%

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%.

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%.

VV’s dividend yield is 0.34% lower than that of VBR (1.26% vs. 1.6%). Also, VV yielded on average 2.46% more per year over the past decade (14.75% vs. 12.28%). The expense ratio of VV is 0.03 percentage points lower than VBR’s (0.04% vs. 0.07%).

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Fund Composition

Industry Exposure

VV vs. VBR - Industry Exposure

VV VBR
Technology 25.38% 8.39%
Industrials 8.39% 18.44%
Energy 2.62% 5.15%
Communication Services 11.68% 1.77%
Utilities 2.35% 3.65%
Healthcare 13.22% 7.16%
Consumer Defensive 6.06% 4.36%
Real Estate 2.7% 10.92%
Financial Services 13.82% 20.04%
Consumer Cyclical 11.65% 13.82%
Basic Materials 2.13% 6.31%

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%.

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%.

VV is 16.99% more exposed to the Technology sector than VBR (25.38% vs 8.39%). VV’s exposure to Financial Services and Healthcare stocks is 6.22% lower and 6.06% higher respectively (13.82% vs. 20.04% and 13.22% vs. 7.16%). In total, Utilities, Energy, and Real Estate also make up 12.05% less of the fund’s holdings compared to VBR (7.67% vs. 19.72%).

Holdings

VV - Holdings

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%.

VBR - Holdings

VBR Holdings Weight
Diamondback Energy Inc 0.55%
VICI Properties Inc Ordinary Shares 0.54%
IDEX Corp 0.54%
Nuance Communications Inc 0.5%
Molina Healthcare Inc 0.48%
Signature Bank 0.46%
Novavax Inc 0.44%
Howmet Aerospace Inc 0.44%
Apollo Global Management Inc Class A 0.42%
Brown & Brown Inc 0.41%

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

VV VBR
Mean Return 1.24 1.08
R-squared 99.86 82.2
Std. Deviation 13.75 18.37
Alpha -0.08 -5.09
Beta 1.01 1.23
Sharpe Ratio 1.04 0.67
Treynor Ratio 14.14 9.15

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Standard Deviation of 13.75 with a Treynor Ratio of 14.14 and a Mean Return of 1.24. Its Beta is 1.01 while VV’s Sharpe Ratio is 1.04. Furthermore, the fund has a Alpha of -0.08 and a R-squared of 99.86.

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

VV’s Mean Return is 0.16 points higher than that of VBR and its R-squared is 17.66 points higher. With a Standard Deviation of 13.75, VV is slightly less volatile than VBR. The Alpha and Beta of VV are 5.01 points higher and 0.22 points lower than VBR’s Alpha and Beta.

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Performance

Annual Returns

VV vs. VBR - Annual Returns

Year VV VBR
2020 20.99% 5.82%
2019 31.39% 22.76%
2018 -4.44% -12.22%
2017 22.03% 11.79%
2016 11.65% 24.8%
2015 1.07% -4.67%
2014 13.39% 10.55%
2013 32.65% 36.57%
2012 16.09% 18.78%
2011 1.58% -4.05%
2010 15.81% 24.97%

VV had its best year in 2013 with an annual return of 32.65%. VV’s worst year over the past decade yielded -4.44% and occurred in 2018. In most years the Vanguard Large-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.39%, 15.81%, and 16.09% 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

VV vs. VBR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VV $10,000 $42,970 14.75%
VBR $10,000 $32,611 12.28%

A $10,000 investment in VV would have resulted in a final balance of $42,970. This is a profit of $32,970 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.75%.

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%.

VV’s CAGR is 2.46 percentage points higher than that of VBR and as a result, would have yielded $10,359 more on a $10,000 investment. Thus, VV outperformed VBR by 2.46% annually.


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