VTI vs VBR: What’s The Difference? 2023LAST UPDATED: July 25, 2023 | By Conrad Golly
The Vanguard Total Stock Market ETF (VTI) and the Vanguard Small-Cap Value ETF (VBR) are both interesting ETFs. VTI tracks CRSP US Total Market Index and VBR tracks CRSP US Small Value. So, what’s the difference between VTI vs VBR? And which fund is better?
VTI vs VBR: The expense ratio of VTI is 0.03% and VBR is 0.07%. VTI’s biggest holding is Apple Inc and VBR’s biggest holding is Builders FirstSource Inc. Overall, VTI has provided 1.80% Higher returns than VBR over the past ten years.In this article, we’ll compare VTI vs VBR. We’ll look at holdings and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VTI’s and VBR’s industry exposure, risk metrics, fund composition and examine how these affect their overall returns.
Summary VTI vs VBR
VBR vs VTI Table
|Name||Vanguard Total Stock Market ETF||Vanguard Small-Cap Value ETF|
|Category||Large Blend||Small Value|
The Vanguard Total Stock Market ETF (VTI) is a CRSP US Total Market Index fund that is issued by Vanguard. It currently has $1.27T total assets under management and has yielded an average annual return of 12.54% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.03%.
The Vanguard Small-Cap Value ETF (VBR) is a CRSP US Small Value that is issued by Vanguard. It currently has $44.18B total assets under management and has yielded an average annual return of 10.74% over the past 10 years. The fund has a dividend yield of 2.30% with an expense ratio of 0.07%.
VTI’s dividend yield is Lower than that of VBR (1.57% vs 2.30%). Also, VTI yielded on average 1.80% Higher per year over the past decade (12.54% vs 10.74%). The expense ratio of VTI is -0.04% percentage points Lower than VBR’s (0.03% vs 0.07%).
Fund Composition VTI vs VBR
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Industry Exposure Table vs VTI
The Vanguard Total Stock Market ETF (VTI) has the most exposure to the Technology sector at 27.62%. This is followed by Healthcare and Financial Services at 13.73% and 12.12% respectively. Basic Materials (2.37%), Utilities (2.61%), and Real Estate (3.13%) only make up 8.11% of the fund’s total assets.
VTI’s middle weighted sectors is made up with moderate exposure to Energy, Consumer Defensive, Communication Services, Industrials, and Consumer Cyclical stocks at 4.08%, 6.27%, 7.97%, 9.07%, and 10.35%.
The Vanguard Small-Cap Value ETF (VBR) has the most exposure to the Industrials sector at 0.2127. This is followed by Financial Services and Consumer Cyclical at 0.1853 and 0.129 respectively. Communication Services (0.0185), Consumer Defensive (0.0467), and Energy (0.0474) only make up 0.1126 of the fund’s total assets.
VBR’s middle weighted sectors is made up with moderate exposure to Utilities, Basic Materials, Healthcare, Technology, and Real Estate stocks at 0.0485, 0.057, 0.0629, 9.07%, and 10.35%.
VTI is 19.95% More exposed to the Technology sector than VBR (27.62% vs 7.67%). VTI’s exposure to Healthcare and Financial Services stocks is 7.44% More and -6.41% Less respectively (13.73% vs. 6.29%) and (12.12% vs. 18.53%).
In total, VTI’s bottom three industries, Real Estate, Utilities, and Basic Materials also make up -3.15% Lower of the fund’s holdings compared to VBR’s bottom three industries. (8.11% vs. 0.1126).
Holdings Vanguard Total Stock Market ETF (VTI)
|Alphabet Inc Class A||1.80%|
|Alphabet Inc Class C||1.53%|
|Meta Platforms Inc Class A||1.44%|
|Berkshire Hathaway Inc Class B||1.38%|
|UnitedHealth Group Inc||1.12%|
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, NVIDIA Corp, and Alphabet Inc Class A at 6.53%, 5.99%, 2.57%, 2.17%, and 1.80%.
Alphabet Inc Class C (1.53%), Meta Platforms Inc Class A (1.44%), and Berkshire Hathaway Inc Class B (1.38%) have a slightly smaller but still significant weight. Tesla Inc and UnitedHealth Group Inc are also represented in the VTI’s holdings at 1.34% and 1.12%.
Holdings Vanguard Small-Cap Value ETF (VBR)
|Builders FirstSource Inc||0.007|
|Atmos Energy Corp||0.0063|
|Reliance Steel & Aluminum Co||0.0057|
|Booz Allen Hamilton Holding Corp Class A||0.0055|
|First Citizens BancShares Inc Class A||0.0052|
|Gaming and Leisure Properties Inc||0.0049|
|Kimco Realty Corp||0.0047|
VTI’s Top Holdings are Builders FirstSource Inc, Atmos Energy Corp, IDEX Corp, Bunge Ltd, and Reliance Steel & Aluminum Co at 0.007, 0.0063, 0.0062, 0.0057, and 0.0057.
Booz Allen Hamilton Holding Corp Class A (0.0055), First Citizens BancShares Inc Class A (0.0052), and Gaming and Leisure Properties Inc (0.0049) have a slightly smaller but still significant weight. Kimco Realty Corp and Jabil Inc are also represented in the ’s holdings at 0.0047 and 0.0046.
Risk Analysis VTI vs VBR
The Vanguard Total Stock Market ETF has a Standard Deviation of 18.17 with a Alpha of -0.8 and a Treynor Ratio of 10.57. Its Sharpe Ratio is 0.64 while VTI’s Beta is 1.01. Furthermore, the fund has a Mean Return of 1.09 and a R-squared of 99.08.
The VBR has a R-squared of 71.71 with a Mean Return of 1.37 and a Standard Deviation of 20.83. Its Sharpe Ratio is 0.72 while VBR’s Alpha is 2.81. Furthermore, the fund has a Beta of 0.99 and a Treynor Ratio of 14.07.
Performance VTI vs VBR
Annual Returns VTI vs VBR
VTI had its best year in 2013 with an annual return of 33.45%. VTI’s worst year over the past decade yielded -19.51% and occurred in 2022. In most years the Vanguard Total Stock Market ETF provided moderate returns such as in 2019, 2021, and 2017 where annual returns amounted to 31.35%, 28.78%, and 21.77% respectively.
The year 2013 was the strongest year for VBR, returning 0.3655 on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -0.1226. Most years the Vanguard Small-Cap Value ETF has given investors modest returns, such as in 2021, 2016, and 2019, when gains were 17.56%, 18.44%, and 27.32% respectively.
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Performance Comparison VTI vs VBR
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VTI would have resulted in a final balance of $29,488.88. This is a profit of $19,488.88 over 10 years and amounts to a compound annual growth rate (CAGR) of 12.77%.
With a $10,000 investment in VBR, the end total would have been $27,247.03. This equates to a $17,247.03 profit over 10 years and a compound annual growth rate (CAGR) of 11.78%.
VBR’s CAGR is -0.99% Lower than that of VTI and as a result, would have yielded -$2,241.85 Less on a $10,000 investment. Thus, VBR Underperformed VTI by -$224.18 annually.