VXF vs. EFV: What’s The Difference?

The Vanguard Extended Market Index Fund ETF Shares (VXF) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between VXF and EFV? And which fund is better?

The expense ratio of VXF is 0.33 percentage points lower than EFV’s (0.06% vs. 0.39%). VXF also has a higher exposure to the technology sector and a higher standard deviation. Overall, VXF has provided higher returns than EFV over the past 11 years.

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

Summary

VXF EFV
Name Vanguard Extended Market Index Fund ETF Shares iShares MSCI EAFE Value ETF
Category Mid-Cap Growth Foreign Large Value
Issuer Vanguard iShares
AUM 114.53B 14.37B
Avg. Return 15.47% 3.99%
Div. Yield 1.19% 2.94%
Expense Ratio 0.06% 0.39%

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%.

The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

VXF’s dividend yield is 1.75% lower than that of EFV (1.19% vs. 2.94%). Also, VXF yielded on average 11.48% more per year over the past decade (15.47% vs. 3.99%). The expense ratio of VXF is 0.33 percentage points lower than EFV’s (0.06% vs. 0.39%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

VXF vs. EFV - Industry Exposure

VXF EFV
Technology 23.61% 2.98%
Industrials 11.31% 11.6%
Energy 2.46% 6.6%
Communication Services 7.29% 6.46%
Utilities 1.65% 6.14%
Healthcare 15.25% 9.19%
Consumer Defensive 3.09% 6.82%
Real Estate 8.16% 5.06%
Financial Services 12.56% 26.55%
Consumer Cyclical 11.35% 9.0%
Basic Materials 3.26% 9.59%

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%.

The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

VXF is 20.63% more exposed to the Technology sector than EFV (23.61% vs 2.98%). VXF’s exposure to Healthcare and Financial Services stocks is 6.06% higher and 13.99% lower respectively (15.25% vs. 9.19% and 12.56% vs. 26.55%). In total, Energy, Consumer Defensive, and Basic Materials also make up 14.20% less of the fund’s holdings compared to EFV (8.81% vs. 23.01%).

Holdings

VXF - Holdings

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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

VXF EFV
Mean Return 1.24 0.42
R-squared 85.73 92.15
Std. Deviation 18.04 16.53
Alpha -3.26 -1.77
Beta 1.23 1.05
Sharpe Ratio 0.79 0.26
Treynor Ratio 10.92 2.92

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Treynor Ratio of 10.92 with a Sharpe Ratio of 0.79 and a Alpha of -3.26. Its Mean Return is 1.24 while VXF’s R-squared is 85.73. Furthermore, the fund has a Standard Deviation of 18.04 and a Beta of 1.23.

The iShares MSCI EAFE Value ETF (EFV) has a Treynor Ratio of 2.92 with a Mean Return of 0.42 and a R-squared of 92.15. Its Sharpe Ratio is 0.26 while EFV’s Standard Deviation is 16.53. Furthermore, the fund has a Alpha of -1.77 and a Beta of 1.05.

VXF’s Mean Return is 0.82 points higher than that of EFV and its R-squared is 6.42 points lower. With a Standard Deviation of 18.04, VXF is slightly more volatile than EFV. The Alpha and Beta of VXF are 1.49 points lower and 0.18 points higher than EFV’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).

Performance

Annual Returns

VXF vs. EFV - Annual Returns

Year VXF EFV
2020 32.19% -2.78%
2019 28.04% 15.97%
2018 -9.37% -14.88%
2017 18.1% 21.22%
2016 16.16% 4.87%
2015 -3.26% -5.89%
2014 7.55% -5.65%
2013 38.37% 22.61%
2012 18.48% 17.52%
2011 -3.61% -12.24%
2010 27.55% 3.18%

VXF had its best year in 2013 with an annual return of 38.37%. VXF’s worst year over the past decade yielded -9.37% and occurred in 2018. In most years the Vanguard Extended Market Index Fund ETF Shares provided moderate returns such as in 2016, 2017, and 2012 where annual returns amounted to 16.16%, 18.1%, and 18.48% respectively.

The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

VXF vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VXF $10,000 $44,130 15.47%
EFV $10,000 $14,134 3.99%

A $10,000 investment in VXF would have resulted in a final balance of $44,130. This is a profit of $34,130 over 11 years and amounts to a compound annual growth rate (CAGR) of 15.47%.

With a $10,000 investment in EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

VXF’s CAGR is 11.48 percentage points higher than that of EFV and as a result, would have yielded $29,996 more on a $10,000 investment. Thus, VXF outperformed EFV by 11.48% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply