What are expense ratios and how do they impact VBK and VBR?

Expense ratios represent the annual operating fee charged by an ETF, expressed as a percentage of assets. Both VBK and VBR feature an identical expense ratio of 0.05%. This means for every £1,000 invested, an investor pays just £0.50 annually. Since these fees are identical, cost is not a differentiating factor between these two Vanguard funds.

How does dividend yield work for ETFs like VBK and VBR?

Dividend yield indicates how much income an ETF generates relative to its price. VBR has a higher dividend yield of 1.81%, whereas VBK offers 0.45%. This suggests VBR distributes more income per share, reflecting its focus on value companies that often pay dividends. VBK's lower yield aligns with its growth focus, where companies typically retain earnings for expansion rather than distributing them.

Why are tracking indexes important for VBK and VBR?

Tracking indexes ensure funds replicate a specific market segment. However, for both VBK and VBR, the specific tracked index is not available, which limits transparency regarding their selection methodologies. Investors relying on index rules may find it harder to compare VBK and VBR against benchmarks or other funds, making it essential to review their stated investment objectives and portfolios for insights.

What are the top holdings in VBK and how do they differ from VBR?

VBK focuses on growth companies, with top holdings like NTRA and RVMD, each representing small percentages of the portfolio. In contrast, VBR emphasises value stocks such as MRNA and JBL. Notably, none of the top ten holdings are shared between the two funds, highlighting the distinct investment styles of Vanguard Small-Cap Growth ETF versus Vanguard Small-Cap Value ETF.

How do the net assets of VBK and VBR affect their liquidity?

Net assets reflect an ETF's size and its ability to handle trading volume. VBR boasts $37.0 billion in net assets, suggesting high liquidity, whereas VBK holds $22.9 billion. Larger funds typically have tighter bid-ask spreads and lower transaction costs. For investors prioritising liquidity, VBR's greater size may provide added convenience when trading compared to VBK.

What sectors do VBK and VBR invest in, and why is it relevant?

Sector exposure helps investors understand diversification and concentration risks. Unfortunately, detailed sector weights are not available for either VBK or VBR. Without this data, it is challenging to assess whether growth companies dominate tech-heavy segments in VBK or if VBR's value stocks skew towards consumer staples or financials. Further information would aid portfolio alignment.

How do market conditions influence the performance of VBK?

VBK, as a growth-focused ETF, tends to perform well in bullish markets where investors favour innovation and expansion. Its holdings in tech-driven companies like CRDO and TWLO exemplify this trend. However, during downturns or periods prioritising stability, its lower dividend yield may make it less appealing compared to more income-oriented funds like VBR.

What drives the appeal of VBR in different economic climates?

VBR's value orientation often attracts investors during economic recoveries when undervalued companies demonstrate potential for upside. Its emphasis on firms like ATO and NRG highlights its appeal in resource-sensitive or stable industries. Additionally, with a 1.81% dividend yield, VBR may offer steady income opportunities in environments favouring defensive strategies over aggressive growth.

How can beginners interpret the fee difference between VBK and VBR?

Both funds charge the same expense ratio of 0.05%, meaning fees won't affect investor decisions. Instead, beginners might compare their dividend yields, fund sizes, or holdings' nature to decide which fund aligns with their investment goals. Understanding fee parity simplifies the process of choosing between VBK and VBR based on non-cost factors.

Is it worthwhile to hold both VBK and VBR in a portfolio?

Holding both could capture the broader small-cap market while balancing growth and value characteristics. Since none of the top ten holdings overlap, they represent complementary portfolios. Diversifying between these styles allows investors to hedge against volatility while gaining exposure to the full small-cap universe via VBK and VBR.

What should I know before using ETF comparison tools for VBK or VBR?

Comparison tools rely on publicly available data, which may lack details like sector weights or specific tracking indexes for both funds. Always cross-check information and ensure it aligns with official disclosures from Vanguard. While these tools simplify decision-making, remember that educational content doesn't replace thorough due diligence.

Do I need to consider tax implications when comparing VBK and VBR?

Tax treatment varies depending on jurisdiction and income source. Generally, dividend-yielding funds like VBR could generate taxable income through distributions, while capital gains from VBK might be taxed differently based on individual circumstances. Consult a tax advisor to evaluate specific liabilities before choosing between VBK and VBR for your needs.

VBK vs VBR

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare Vanguard Small-Cap Growth ETF (VBK) and Vanguard Small-Cap Value ETF (VBR). This page examines their 0.05% expense ratios, distinct holdings, and dividend yields, while noting that their specific tracked indices are not available. Both funds launched in January 2004, offering low-cost access to small-cap markets with different style focuses. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

VBK

Metric

VBR

0.05%

Expense Ratio

0.05%

0.45%

Dividend Yield

1.81%

$22.91B

Net Assets

$36.98B

550

Holdings

847

Jan 26, 2004

Inception Date

Jan 26, 2004

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Index Tracked

–

Small Growth

Fund Category

Small Value

Both funds charge the same annual fee.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

VBK

Pros

Extremely low expense ratio of 0.05% minimises holding costs for investors over the long term.
Large net assets of $22.9 billion suggest high liquidity and lower risk of fund closure.
Focus on growth companies provides exposure to potentially higher capital appreciation in a small-cap universe.

Considerations

Very low dividend yield of 0.45% limits immediate income generation for investors.
The fund's specific tracked index is not available, creating opacity regarding exact selection methodology.
Concentrated top holdings in sectors like technology may increase volatility compared to more diversified funds.

VBR

Pros

Competitive expense ratio of 0.05% ensures cost-effective access to the small-cap value market.
Substantial net assets of $37.0 billion indicate robust trading liquidity and institutional stability.
Higher dividend yield of 1.81% offers a modest income stream alongside capital exposure.

Considerations

Missing index tracking details prevents verification of the precise value screening criteria used.
Value stocks may underperform during periods of strong market momentum favouring growth companies.
Specific sector weightings are not available, making it difficult to assess concentration risks accurately.

About VBK and VBR

VBK (VBK)

The Vanguard Small-Cap Growth ETF aims to track the performance of small companies in the US that exhibit growth characteristics. It offers investors exposure to 550 holdings, focusing on businesses expected to grow faster than the broader market. With a low expense ratio of 0.05% and net assets of USD 22.91 billion, it provides a cost-effective way to access this segment. Established in January 2004, the fund has maintained its objective to mirror the small-cap growth landscape. While it currently pays no dividend, its dividend yield is 0.45%. Investors should note that small-cap stocks can be more volatile than larger counterparts, and values can rise or fall over time.

VBR (VBR)

The Vanguard Small-Cap Value ETF (VBR) offers investors exposure to smaller companies that are often valued by the market at lower multiples relative to their earnings or book value. With net assets of approximately USD 36.98 billion and a low expense ratio of 0.05%, it aims to provide cost-efficient access to the US small-cap value sector. The fund holds over 840 individual stocks, diversifying risk across a broad range of companies. Historically, small-cap value strategies have been associated with higher potential returns, though they can also experience greater volatility compared to large-cap stocks. VBR pays a dividend yield of around 1.81%, offering a modest income stream. This ETF is suitable for those looking to complement a core portfolio with a factor tilt towards smaller, potentially undervalued businesses, keeping in mind that values can rise and fall.

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VBK vs VBR

Fund Snapshot