VXF vs. VLUE: What’s The Difference?

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

The expense ratio of VXF is 0.09 percentage points lower than VLUE’s (0.06% vs. 0.15%). VXF also has a lower exposure to the technology sector and a higher standard deviation. Overall, VXF has provided higher returns than VLUE over the past 7 years.

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

Summary

VXF VLUE
Name Vanguard Extended Market Index Fund ETF Shares iShares MSCI USA Value Factor ETF
Category Mid-Cap Growth Large Value
Issuer Vanguard iShares
AUM 114.53B 15.95B
Avg. Return 15.47% 8.91%
Div. Yield 1.19% 1.89%
Expense Ratio 0.06% 0.15%

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 USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

VXF’s dividend yield is 0.70% lower than that of VLUE (1.19% vs. 1.89%). Also, VXF yielded on average 6.56% more per year over the past decade (15.47% vs. 8.91%). The expense ratio of VXF is 0.09 percentage points lower than VLUE’s (0.06% vs. 0.15%).

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Fund Composition

Industry Exposure

VXF vs. VLUE - Industry Exposure

VXF VLUE
Technology 23.61% 26.89%
Industrials 11.31% 9.14%
Energy 2.46% 2.42%
Communication Services 7.29% 10.39%
Utilities 1.65% 2.68%
Healthcare 15.25% 14.31%
Consumer Defensive 3.09% 7.22%
Real Estate 8.16% 3.19%
Financial Services 12.56% 10.96%
Consumer Cyclical 11.35% 10.66%
Basic Materials 3.26% 2.14%

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 USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

VXF is 3.28% less exposed to the Technology sector than VLUE (23.61% vs 26.89%). VXF’s exposure to Healthcare and Financial Services stocks is 0.94% higher and 1.60% higher respectively (15.25% vs. 14.31% and 12.56% vs. 10.96%). In total, Energy, Consumer Defensive, and Basic Materials also make up 2.97% less of the fund’s holdings compared to VLUE (8.81% vs. 11.78%).

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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

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Risk Analysis

VXF VLUE
Mean Return 1.24 0
R-squared 85.73 0
Std. Deviation 18.04 0
Alpha -3.26 0
Beta 1.23 0
Sharpe Ratio 0.79 0
Treynor Ratio 10.92 0

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a R-squared of 85.73 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 Alpha of -3.26.

The iShares MSCI USA Value Factor ETF (VLUE) has a Mean Return of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Beta is 0 while VLUE’s Treynor Ratio is 0. Furthermore, the fund has a Alpha of 0 and a R-squared of 0.

VXF’s Mean Return is 1.24 points higher than that of VLUE and its R-squared is 85.73 points higher. With a Standard Deviation of 18.04, VXF is slightly more volatile than VLUE. The Alpha and Beta of VXF are 3.26 points lower and 1.23 points higher than VLUE’s Alpha and Beta.

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Performance

Annual Returns

VXF vs. VLUE - Annual Returns

Year VXF VLUE
2020 32.19% -0.32%
2019 28.04% 27.47%
2018 -9.37% -11.18%
2017 18.1% 21.97%
2016 16.16% 15.68%
2015 -3.26% -3.54%
2014 7.55% 12.29%
2013 38.37% 0.0%
2012 18.48% 0.0%
2011 -3.61% 0.0%
2010 27.55% 0.0%

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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

VXF vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VXF $10,000 $21,894 15.47%
VLUE $10,000 $17,247 8.91%

A $10,000 investment in VXF would have resulted in a final balance of $21,894. This is a profit of $11,894 over 7 years and amounts to a compound annual growth rate (CAGR) of 15.47%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

VXF’s CAGR is 6.56 percentage points higher than that of VLUE and as a result, would have yielded $4,647 more on a $10,000 investment. Thus, VXF outperformed VLUE by 6.56% annually.


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