VV vs. VOE: What’s The Difference?

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

The expense ratio of VV is 0.03 percentage points lower than VOE’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 VOE over the past 11 years.

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

Summary

VV VOE
Name Vanguard Large-Cap Index Fund ETF Shares Vanguard Mid-Cap Value Index Fund ETF Shares
Category Large Blend Mid-Cap Value
Issuer Vanguard Vanguard
AUM 37.65B 26.78B
Avg. Return 14.75% 12.52%
Div. Yield 1.26% 1.87%
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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

VV’s dividend yield is 0.61% lower than that of VOE (1.26% vs. 1.87%). Also, VV yielded on average 2.22% more per year over the past decade (14.75% vs. 12.52%). The expense ratio of VV is 0.03 percentage points lower than VOE’s (0.04% vs. 0.07%).

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Fund Composition

Industry Exposure

VV vs. VOE - Industry Exposure

VV VOE
Technology 25.38% 9.85%
Industrials 8.39% 9.4%
Energy 2.62% 5.69%
Communication Services 11.68% 5.27%
Utilities 2.35% 10.93%
Healthcare 13.22% 7.04%
Consumer Defensive 6.06% 4.85%
Real Estate 2.7% 11.48%
Financial Services 13.82% 18.26%
Consumer Cyclical 11.65% 11.8%
Basic Materials 2.13% 5.44%

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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

VV is 15.53% more exposed to the Technology sector than VOE (25.38% vs 9.85%). VV’s exposure to Financial Services and Healthcare stocks is 4.44% lower and 6.18% higher respectively (13.82% vs. 18.26% and 13.22% vs. 7.04%). In total, Utilities, Energy, and Real Estate also make up 20.43% less of the fund’s holdings compared to VOE (7.67% vs. 28.10%).

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%.

VOE - Holdings

VOE Holdings Weight
Carrier Global Corp Ordinary Shares 1.28%
International Flavors & Fragrances Inc 1.13%
Motorola Solutions Inc 1.12%
Discover Financial Services 1.09%
Welltower Inc 1.05%
Corteva Inc 0.99%
Valero Energy Corp 0.97%
Corning Inc 0.95%
Willis Towers Watson PLC 0.9%
D.R. Horton Inc 0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

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Risk Analysis

VV VOE
Mean Return 1.24 1.05
R-squared 99.86 88.76
Std. Deviation 13.75 15.98
Alpha -0.08 -3.77
Beta 1.01 1.11
Sharpe Ratio 1.04 0.75
Treynor Ratio 14.14 10.19

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 Sharpe Ratio is 1.04 while VV’s Beta is 1.01. Furthermore, the fund has a R-squared of 99.86 and a Alpha of -0.08.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Treynor Ratio of 10.19 with a Standard Deviation of 15.98 and a Mean Return of 1.05. Its Beta is 1.11 while VOE’s R-squared is 88.76. Furthermore, the fund has a Alpha of -3.77 and a Sharpe Ratio of 0.75.

VV’s Mean Return is 0.19 points higher than that of VOE and its R-squared is 11.10 points higher. With a Standard Deviation of 13.75, VV is slightly less volatile than VOE. The Alpha and Beta of VV are 3.69 points higher and 0.10 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

VV vs. VOE - Annual Returns

Year VV VOE
2020 20.99% 2.5%
2019 31.39% 27.98%
2018 -4.44% -12.41%
2017 22.03% 17.05%
2016 11.65% 15.26%
2015 1.07% -1.8%
2014 13.39% 13.98%
2013 32.65% 37.65%
2012 16.09% 16.04%
2011 1.58% -0.32%
2010 15.81% 21.83%

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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

VV vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VV $10,000 $42,970 14.75%
VOE $10,000 $33,655 12.52%

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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.

VV’s CAGR is 2.22 percentage points higher than that of VOE and as a result, would have yielded $9,315 more on a $10,000 investment. Thus, VV outperformed VOE by 2.22% annually.


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