VXF vs. VBK: What’s The Difference?

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

The expense ratio of VXF is 0.01 percentage points lower than VBK’s (0.06% vs. 0.07%). VXF also has a lower exposure to the technology sector and a higher standard deviation. Overall, VXF has provided lower returns than VBK over the past 11 years.

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

Summary

VXF VBK
Name Vanguard Extended Market Index Fund ETF Shares Vanguard Small-Cap Growth Index Fund ETF Shares
Category Mid-Cap Growth Small Growth
Issuer Vanguard Vanguard
AUM 114.53B 37.89B
Avg. Return 15.47% 16.53%
Div. Yield 1.19% 0.45%
Expense Ratio 0.06% 0.07%

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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.

VXF’s dividend yield is 0.74% higher than that of VBK (1.19% vs. 0.45%). Also, VXF yielded on average 1.05% less per year over the past decade (15.47% vs. 16.53%). The expense ratio of VXF is 0.01 percentage points lower than VBK’s (0.06% vs. 0.07%).

Fund Composition

Industry Exposure

VXF vs. VBK - Industry Exposure

VXF VBK
Technology 23.61% 27.87%
Industrials 11.31% 13.19%
Energy 2.46% 1.77%
Communication Services 7.29% 3.24%
Utilities 1.65% 0.32%
Healthcare 15.25% 23.24%
Consumer Defensive 3.09% 3.83%
Real Estate 8.16% 7.87%
Financial Services 12.56% 4.05%
Consumer Cyclical 11.35% 12.13%
Basic Materials 3.26% 2.49%

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%.

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.

VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.

VXF is 4.26% less exposed to the Technology sector than VBK (23.61% vs 27.87%). VXF’s exposure to Healthcare and Financial Services stocks is 7.99% lower and 8.51% higher respectively (15.25% vs. 23.24% and 12.56% vs. 4.05%). In total, Energy, Consumer Defensive, and Basic Materials also make up 0.72% more of the fund’s holdings compared to VBK (8.81% vs. 8.09%).

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%.

VBK - Holdings

VBK Holdings Weight
Charles River Laboratories International Inc 0.78%
Pool Corp 0.73%
Bio-Techne Corp 0.73%
Avantor Inc 0.73%
PerkinElmer Inc 0.72%
Entegris Inc 0.7%
PTC Inc 0.62%
Fair Isaac Corp 0.57%
Bill.com Holdings Inc Ordinary Shares 0.56%
Avalara Inc 0.55%

VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.

Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.

Risk Analysis

VXF VBK
Mean Return 1.24 1.22
R-squared 85.73 80.56
Std. Deviation 18.04 17.95
Alpha -3.26 -2.81
Beta 1.23 1.18
Sharpe Ratio 0.79 0.78
Treynor Ratio 10.92 11.18

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

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Standard Deviation of 17.95 with a R-squared of 80.56 and a Beta of 1.18. Its Treynor Ratio is 11.18 while VBK’s Sharpe Ratio is 0.78. Furthermore, the fund has a Mean Return of 1.22 and a Alpha of -2.81.

VXF’s Mean Return is 0.02 points higher than that of VBK and its R-squared is 5.17 points higher. With a Standard Deviation of 18.04, VXF is slightly more volatile than VBK. The Alpha and Beta of VXF are 0.45 points lower and 0.05 points higher than VBK’s Alpha and Beta.

Performance

Annual Returns

VXF vs. VBK - Annual Returns

Year VXF VBK
2020 32.19% 35.29%
2019 28.04% 32.75%
2018 -9.37% -5.68%
2017 18.1% 21.9%
2016 16.16% 10.74%
2015 -3.26% -2.51%
2014 7.55% 4.02%
2013 38.37% 38.18%
2012 18.48% 17.67%
2011 -3.61% -1.43%
2010 27.55% 30.87%

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 VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.

Portfolio Growth

VXF vs. VBK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VXF $10,000 $44,130 15.47%
VBK $10,000 $48,639 16.53%

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 VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.

VXF’s CAGR is 1.05 percentage points lower than that of VBK and as a result, would have yielded $4,509 less on a $10,000 investment. Thus, VXF performed worse than VBK by 1.05% annually.


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