VBR vs VTCIX
Vanguard Morningstar Small-Cap Value ETF vs Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares
Quick Verdict
VTCIX has a lower expense ratio. VBR delivered stronger 1-year returns. VBR offers more diversification with 847 holdings.
Side-by-Side Comparison
| Metric | VBR | VTCIX | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.03% | |
| AUM | $37.3B | $5.2B | |
| Dividend Yield | 1.76% | 0.93% | |
| Holdings | 847 | 836 | |
| YTD Return | +16.61% | +12.53% | |
| 1Y Return | +24.29% | +20.38% | |
| 3Y Return (annualized) | +16.96% | +20.44% | |
| 5Y Return (annualized) | +10.24% | +11.10% | |
| Volatility (annualized) | 19.0% | 16.1% | |
| Max Drawdown | -64.0% | -26.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Feb 24, 1999 |
VBR vs VTCIX Performance
Vanguard Morningstar Small-Cap Value ETF (VBR) is a ETF from Vanguard (US) and Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares (VTCIX) is a mutual fund from Vanguard (US). Over the past year VBR returned +24.29% while VTCIX returned +20.38%. Year to date, VBR is up 16.61% versus a gain of 12.53% for VTCIX.
Over three years, VBR compounded at +16.96% per year against +20.44% for VTCIX; over five years the annualized figures are +10.24% and +11.10% respectively. Across the full 5-year window we track, VTCIX has the edge at +11.10% annualized vs +7.97%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VBR has been the more volatile fund, with annualized monthly volatility of 19.0% compared with 16.1% for VTCIX. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -64.0% for VBR and -26.0% for VTCIX. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.84. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VBR charges 0.05% per year while VTCIX charges 0.03%. On a $10,000 position that is $5 vs $3 annually, a gap of $2 per year that compounds over a long holding period. On income, VBR currently yields 1.76% against 0.93% for VTCIX.
Holdings Overlap
VBR and VTCIX share 274 holdings out of 1386 unique holdings combined, representing a 6.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VBR or VTCIX?
VBR has an expense ratio of 0.05% while VTCIX charges 0.03%. VTCIX is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, VBR or VTCIX?
Over the past year VBR returned +24.29% vs +20.38% for VTCIX, so VBR leads on 1-year performance. Over the longest common window we track (5 years), VBR annualized +7.97% vs +11.10% for VTCIX. Past performance does not guarantee future results.
Which is riskier, VBR or VTCIX?
VBR has been the more volatile fund at 19.0% annualized versus 16.1% for VTCIX. Worst drawdown: VBR -64.0% vs VTCIX -26.0%.
Should I hold both VBR and VTCIX?
VBR and VTCIX have a monthly-return correlation of 0.84, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VBR and VTCIX?
VBR and VTCIX share 274 common holdings with a 6.0% weight overlap. Combined, they hold 1386 unique securities.
Which pays a higher dividend, VBR or VTCIX?
VBR yields 1.76% while VTCIX yields 0.93%, so VBR currently pays the higher dividend yield.
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