The Vanguard Extended Market Index Fund ETF Shares (VXF) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and VHT is a Vanguard Health fund. So, what’s the difference between VXF and VHT? And which fund is better?
The expense ratio of VXF is 0.04 percentage points lower than VHT’s (0.06% vs. 0.1%). VXF also has a higher exposure to the technology sector and a higher standard deviation. Overall, VXF has provided lower returns than VHT over the past 11 years.
In this article, we’ll compare VXF vs. VHT. We’ll look at annual returns and risk metrics, as well as at their performance and holdings. Moreover, I’ll also discuss VXF’s and VHT’s fund composition, portfolio growth, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Extended Market Index Fund ETF Shares||Vanguard Health Care Index Fund ETF Shares|
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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
VXF’s dividend yield is 0.04% higher than that of VHT (1.19% vs. 1.15%). Also, VXF yielded on average 0.57% less per year over the past decade (15.47% vs. 16.04%). The expense ratio of VXF is 0.04 percentage points lower than VHT’s (0.06% vs. 0.1%).
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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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
VXF is 23.56% more exposed to the Technology sector than VHT (23.61% vs 0.05%). VXF’s exposure to Healthcare and Financial Services stocks is 84.32% lower and 12.54% higher respectively (15.25% vs. 99.57% and 12.56% vs. 0.02%). In total, Energy, Consumer Defensive, and Basic Materials also make up 8.50% more of the fund’s holdings compared to VHT (8.81% vs. 0.31%).
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|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%.
|Johnson & Johnson||7.34%|
|UnitedHealth Group Inc||6.44%|
|Thermo Fisher Scientific Inc||3.37%|
|Merck & Co Inc||3.33%|
|Eli Lilly and Co||3.17%|
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
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The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Mean Return of 1.24 with a Alpha of -3.26 and a R-squared of 85.73. Its Beta is 1.23 while VXF’s Standard Deviation is 18.04. Furthermore, the fund has a Treynor Ratio of 10.92 and a Sharpe Ratio of 0.79.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a R-squared of 59.86 with a Mean Return of 1.33 and a Treynor Ratio of 20.74. Its Beta is 0.75 while VHT’s Standard Deviation is 13.58. Furthermore, the fund has a Alpha of 7.99 and a Sharpe Ratio of 1.13.
VXF’s Mean Return is 0.09 points lower than that of VHT and its R-squared is 25.87 points higher. With a Standard Deviation of 18.04, VXF is slightly more volatile than VHT. The Alpha and Beta of VXF are 11.25 points lower and 0.48 points higher than VHT’s Alpha and Beta.
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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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
VXF’s CAGR is 0.57 percentage points lower than that of VHT and as a result, would have yielded $4,334 less on a $10,000 investment. Thus, VXF performed worse than VHT by 0.57% annually.
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