The Vanguard Extended Market Index Fund ETF Shares (VXF) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between VXF and VTIP? And which fund is better?
The expense ratio of VXF is 0.01 percentage points higher than VTIP’s (0.06% vs. 0.05%). VXF also has a high exposure to the technology sector while VTIP is mostly comprised of AAA bonds. Overall, VXF has provided higher returns than VTIP over the past 7 years.
In this article, we’ll compare VXF vs. VTIP. We’ll look at annual returns and fund composition, as well as at their performance and portfolio growth. Moreover, I’ll also discuss VXF’s and VTIP’s holdings, risk metrics, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Extended Market Index Fund ETF Shares||Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares|
|Category||Mid-Cap Growth||Inflation-Protected Bond|
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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.
VXF’s dividend yield is 0.16% lower than that of VTIP (1.19% vs. 1.35%). Also, VXF yielded on average 13.68% more per year over the past decade (15.47% vs. 1.79%). The expense ratio of VXF is 0.01 percentage points higher than VTIP’s (0.06% vs. 0.05%).
|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%.
|VTIP Bond Sectors||Weight|
VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a Standard Deviation of 18.04 and a Sharpe Ratio of 0.79. Its Beta is 1.23 while VXF’s Treynor Ratio is 10.92. Furthermore, the fund has a R-squared of 85.73 and a Mean Return of 1.24.
The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a R-squared of 0 with a Treynor Ratio of 0 and a Standard Deviation of 0. Its Sharpe Ratio is 0 while VTIP’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Alpha of 0.
VXF’s Mean Return is 1.24 points higher than that of VTIP and its R-squared is 85.73 points higher. With a Standard Deviation of 18.04, VXF is slightly more volatile than VTIP. The Alpha and Beta of VXF are 3.26 points lower and 1.23 points higher than VTIP’s Alpha and Beta.
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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.
VXF’s CAGR is 13.68 percentage points higher than that of VTIP and as a result, would have yielded $10,589 more on a $10,000 investment. Thus, VXF outperformed VTIP by 13.68% annually.
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