# How Vanguard Morningstar Small-Cap ETF (VB) compares with the whole market and its popular alternatives

> Source: EasyCompare research, https://easycompare.io/research/vb
> Data as of October 20, 2026. Total returns include reinvested dividends. Past performance does not predict future results; nothing here is investment advice.

Built by QuantCommons' quantitative engine, this page is about relative opportunity, not data on VB alone. It places VB (Vanguard Morningstar Small-Cap ETF) against 20+ popular alternatives, its neighboring categories and the entire market of over 10,000 U.S.-listed stocks and ETFs, and surfaces what has done better on consistent outperformance, return for the risk taken, behavior in real market crashes and diversification. The result is a clearer view of where VB stands in the market, and of the alternatives worth a closer look.

Period covered: VB's full trading record, from January 2004 through September 2026. The crash tests reach back to 2000 using older funds and the S&P 500. All returns include reinvested dividends. Data as of October 20, 2026.

## Key findings

- **Right now:** Over the past 6 months, VB rose 1.3% against 9.1% for the S&P 500 and 11.2% for the Nasdaq 100. On the flip side, VB has bounced back 25.1% from its April 2025 low after a 25.4% loss from November 2024 to April 2025 after falling while the S&P 500 fell 16.4%.
- **Fund or market?:** VB fell 1.8% over the past 3 months, 3.6 points ahead of the US small-cap equity ETF IWM (iShares Russell 2000 ETF), which fell 5.4%. The S&P 500 rose 3.9%. Its similar funds did not move as one over the past 3 months: CALF (Pacer US Small Cap Cash Cows ETF) rose 9.4%, while IWM fell 5.4%.
- **Long term:** VB turned $10,000 into $27,900 over the past decade, against $42,100 in the S&P 500. That said, it outpaced every one of its similar funds over the past decade, including IJR (iShares Core S&P Small-Cap ETF) and IWM (iShares Russell 2000 ETF).
- **In a crash:** Across six sell-offs, VB has typically fallen 1.3 times as far as the S&P 500.
- **Diversification:** Against the S&P 500, VB has a correlation of 0.87 over 5 years, more closely than 77% of ETFs with at least $100 million in assets. Next to an index fund it is more of the same, not a cushion.
- **Better options**
  - **Popular alternatives:** VTI (Vanguard Morningstar Total Stock Market ETF) earned more than VB with less volatility over the past 5 years: 11.5% a year at 17.5% volatility, against 6.2% a year at 20.6%.
  - **Nearby categories and themes:** VTV (Vanguard Morningstar Value ETF, US large-cap value) and DIA (State Street SPDR Dow Jones Industrial Average ETF Trust, US large-cap equity) earned more than VB with less volatility over the past 5 years. VTV returned 12.1% a year at 13.7% volatility, against 6.2% a year at 20.6%.
  - **Versus the S&P 500:** Simply owning the S&P 500 would have done better over the past 5 years: 12.7% a year at 17.1% volatility, against 6.2% at 20.6% for VB.

## How much would $10,000 in VB have grown?

This chart tracks a hypothetical $10,000 investment in VB over the past 22 years, with dividends reinvested, alongside the same amount in the S&P 500, investments that ended ahead of VB over the same span and VB's popular alternatives, among those that traded for the entire period.

- $10,000 invested in VB at the end of September 2004 would have grown to $75,500 by September 2026, less than the $102,174 it would have become in SPY, an S&P 500 fund.
- Five of the eight other investments on the chart ended ahead of VB, and VTI finished highest, at $103,071.

## VB at a glance

This section summarizes the key facts about the fund, its returns over periods from one to ten years and the risk it has carried, with dividends reinvested throughout.

- VB's deepest decline since it began trading in 2004 was 60.1%, from July 2007 to March 2009. It took 22 months from the low to climb back to its old high.
- Over 21 full calendar years, VB's best was 2013, when it returned 37.7%, and its worst was 2008, when it lost 36.2%. It lost money in six of those years.
- VB is 6.6% below its all-time high.

- Type: ETF, Broad Market (Asset Management)
- Trading since: January 30, 2004
- Assets: $176B
- Expense ratio: 0.03%
- Volatility (5 years): 20.6%; Sharpe ratio: 0.40
- Worst decline ever: −60.1%, from July 13, 2007 to March 9, 2009; back at its high by January 3, 2011

| Period | VB total return |
| --- | --- |
| 1 month | −0.8% |
| 3 months | −1.8% |
| 6 months | +1.3% |
| year to date | +11.2% |
| 1 year | +13.7% |
| 3 years | +66.8% |
| 5 years | +35.2% |
| 10 years | +179% |

## VB against the whole market

Where VB ranks among every stock and fund, and what across the market has done better.

### How does VB rank among all ETFs?

This section ranks VB on return, volatility, risk-adjusted return and worst decline against every ETF worth at least $100 million with enough history.

- VB lands in the broad middle of the market on every measure here. VB's 10-year return ranks in the top 37% of the 958 ETFs with at least $100 million in assets with 10 years of history.

| Measure | VB | Rank |
| --- | --- | --- |
| 1-year return | +13.7% | 955 of 2,485 (top 39%) |
| 3-year return | +66.8% | 842 of 1,949 (top 44%) |
| 5-year return | +35.2% | 934 of 1,560 (top 60%) |
| 10-year return | +179% | 353 of 958 (top 37%) |
| Volatility, 5 years | 20.6% | 1,156 of 1,560 (top 75%) |
| Sharpe ratio, 5 years | 0.40 | 1,089 of 1,560 (top 70%) |
| Worst decline, past 10 years | −42.0% | 610 of 951 (top 65%) |

### What has beaten VB on both return and risk?

Each dot is an investment, placed by how much it earned a year over the past 5 years (higher is better) and how much its price swung, its volatility (further left is calmer).

- 26 stocks and 393 ETFs worth at least $500 million sit in the green region: each earned more than VB over the past 5 years with smaller price swings. That is 12% of the 3,633 screened.
- Among those with at least half VB's swings, LVHI has the best return for its risk: 17.0% a year at 11.1% volatility, 46% less than VB's 20.6%, and a Sharpe ratio (return above cash per unit of volatility) of 1.48 against 0.40 for VB. DXJ earned the most, 26.6% a year, while still swinging less than VB (19.1% against 20.6%).
- Among VB's popular alternatives, VTI, QUAL and VBR are in the region. VTI earned 11.5% a year against 6.2% a year for VB, at 17.5% volatility, 15% less than VB's 20.6%.

### Is there a better investment than VB?

The table below lists investments that beat VB over the past 5 years on at least one of these measures: a higher annual return with lower volatility, a higher annual return at similar volatility, a similar return with lower volatility, a higher Sharpe ratio with a smaller worst decline, a higher total return in most periods from 3 months to 10 years, or smaller losses in recent market crashes, and, for funds, the same exposure at a lower expense ratio.

- Among VB's popular alternatives, VTI earned more than VB with less volatility over the past 5 years: 11.5% a year at 17.5% volatility, against 6.2% a year at 20.6%.
- Looking beyond its popular alternatives, VTV (US large-cap value) and DIA (US large-cap equity) earned more than VB with less volatility over the past 5 years. VTV returned 12.1% a year at 13.7% volatility, against 6.2% a year at 20.6%.
- Simply owning the S&P 500 would have done better over the past 5 years: 12.7% a year at 17.1% volatility, against 6.2% at 20.6% for VB.

The 15 strongest of 419 investments that beat VB over the past 5 years, out of 3,633 stocks and funds worth at least $500 million.

| Investment | Group | Annual return (5 years) | Volatility | Sharpe | Worst decline (10 years) | 10Y return | Correlation with VB | Better on |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| VB: Vanguard Morningstar Small-Cap ETF (this page) |  | +6.2% | 20.6% | 0.40 | −42.0% | +179% |  |  |
| [JNJ](https://easycompare.io/research/jnj): Johnson & Johnson | Pharmaceuticals | +12.7% | 17.9% | 0.76 | −27.4% | +196% | 0.28 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [KO](https://easycompare.io/research/ko): The Coca-Cola Company | Food & Beverages | +14.7% | 16.8% | 0.91 | −37.0% | +204% | 0.27 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [VIG](https://easycompare.io/research/vig): Vanguard Dividend Appreciation ETF | US Dividend Equity | +10.4% | 14.1% | 0.78 | −31.7% | +258% | 0.88 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [SCHD](https://easycompare.io/research/schd): Schwab U.S. Dividend Equity ETF | US Dividend Equity | +9.7% | 14.3% | 0.72 | −33.4% | +252% | 0.79 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [RSG](https://easycompare.io/research/rsg): Republic Services, Inc. | Environmental Services | +13.9% | 18.5% | 0.80 | −34.0% | +446% | 0.33 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [XLV](https://easycompare.io/research/xlv): State Street Health Care Select Sector SPDR ETF | Health Care Equity | +8.4% | 15.3% | 0.60 | −28.4% | +202% | 0.57 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [VTV](https://easycompare.io/research/vtv): Vanguard Morningstar Value ETF | US Large-Cap Value | +12.1% | 13.7% | 0.90 | −36.8% | +235% | 0.89 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| IOO: iShares Global 100 ETF | Global Equity | +15.7% | 17.2% | 0.94 | −31.4% | +361% | 0.75 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| [BRK-B](https://easycompare.io/research/brk-b): Berkshire Hathaway Inc. | Insurance | +13.4% | 17.1% | 0.82 | −29.6% | +274% | 0.50 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods |
| IWX: iShares Russell Top 200 Value ETF | Broad Market | +12.7% | 13.8% | 0.94 | −35.8% | +221% | 0.87 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| RWL: Invesco S&P 500 Revenue ETF | US Large-Cap Equity | +13.7% | 14.4% | 0.97 | −36.1% | +287% | 0.91 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| PTLC: Pacer Trendpilot US Large Cap ETF | Broad Market | +9.5% | 11.8% | 0.83 | −26.6% | +188% | 0.65 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| EQWL: Invesco S&P 100 Equal Weight ETF | Broad Market | +11.6% | 15.0% | 0.81 | −34.3% | +291% | 0.91 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| RECS: Columbia Research Enhanced Core ETF | US Large-Cap Equity | +13.4% | 16.4% | 0.85 | −34.3% | +237% | 0.88 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |
| MOAT: VanEck Morningstar Wide Moat ETF | US Large-Cap Equity | +9.1% | 18.4% | 0.57 | −33.3% | +276% | 0.87 | Higher return, lower volatility; Higher Sharpe, smaller worst decline; Higher return in most periods; Smaller losses in recent crashes |

## VB against its popular alternatives

The investments people most often weigh against VB, compared period by period and year by year.

### How do VB's risk and return compare with its alternatives?

This map plots each investment's annual return over the past 5 years against its volatility, the size of its typical price swings.

- Six of the 21 popular alternatives, led by VTI, QUAL and VBR, were both more rewarding and calmer than VB over the past 5 years, earning a higher annual return with lower volatility.
- Over the past 5 years, VB returned 6.2% a year, less than the S&P 500's 12.7%, with higher volatility (20.6% against 17.1%).

### Has VB consistently beaten its popular alternatives?

This section compares VB with the investments people most often weigh against it, checking each one over eight periods from one month to ten years.

- Five of the 26 popular alternatives, led by QUAL, VTI and VO, outperformed VB in at least 3 of 5 short-term and 2 of 3 long-term timeframes.
- QUAL, VTI and VO outperformed VB in every long-term period and in all but one short-term period, the most consistent record in the group.
- VTI, QUAL and DFAT earned more for the risk they took than VB (a higher Sharpe ratio) and fell less in their worst decline of the past 10 years.

| Investment | 1Y return | 3Y return | 5Y return | 10Y return | Periods ahead of VB | Verdict | Sharpe |
| --- | --- | --- | --- | --- | --- | --- | --- |
| VB: Vanguard Morningstar Small-Cap ETF (this page) | +13.7% | +66.8% | +35.2% | +179% |  |  | 0.40 |
| [QUAL](https://easycompare.io/research/qual): iShares MSCI USA Quality Factor ETF | +16.4% | +76.9% | +71.5% | +293% | 5/5 short-term, 3/3 long-term | all-weather | 0.71 |
| [VTI](https://easycompare.io/research/vti): Vanguard Morningstar Total Stock Market ETF | +15.2% | +87.9% | +72.6% | +302% | 4/5 short-term, 3/3 long-term | all-weather | 0.71 |
| [VO](https://easycompare.io/research/vo): Vanguard Morningstar Mid-Cap ETF | +12.4% | +68.9% | +39.1% | +198% | 4/5 short-term, 3/3 long-term | all-weather | 0.47 |
| IWN: iShares Russell 2000 Value ETF | +19.1% | +73.2% | +38.6% | +147% | 3/5 short-term, 2/3 long-term | consistent | 0.42 |
| AVUV: Avantis U.S. Small Cap Value ETF | +24.4% | +70.2% | +64.9% | — | 3/5 short-term, 2/3 long-term | consistent | 0.56 |
| [VBR](https://easycompare.io/research/vbr): Vanguard Morningstar Small-Cap Value ETF | +16.8% | +66.7% | +48.6% | +169% | 5/5 short-term, 1/3 long-term |  | 0.51 |
| CALF: Pacer US Small Cap Cash Cows ETF | +35.3% | +48.8% | +41.6% | — | 5/5 short-term, 1/3 long-term |  | 0.42 |
| DFAT: Dimensional - US Targeted Value ETF | +20.5% | +64.5% | +57.8% | — | 4/5 short-term, 1/3 long-term |  | 0.54 |
| AVSC: Avantis U.S. Small Cap Equity ETF | +22.7% | +73.5% | — | — | 3/5 short-term, 1/3 long-term |  | — |
| DFAS: Dimensional - US Small Cap ETF | +15.5% | +62.0% | +41.2% | — | 3/5 short-term, 1/3 long-term |  | 0.44 |
| FNDA: Schwab Fundamental U.S. Small Company Index ETF | +16.4% | +61.0% | +39.0% | +174% | 2/5 short-term, 1/3 long-term |  | 0.42 |
| SCHA: Schwab U.S. Small-Cap ETF | +16.5% | +73.1% | +33.9% | +165% | 2/5 short-term, 1/3 long-term |  | 0.38 |
| VTWO: Vanguard Russell 2000 ETF | +12.5% | +72.1% | +30.1% | +161% | 1/5 short-term, 1/3 long-term |  | 0.35 |
| IWO: iShares Russell 2000 Growth ETF | +6.0% | +68.9% | +18.7% | +159% | 0/5 short-term, 1/3 long-term |  | 0.26 |
| [IWM](https://easycompare.io/research/iwm): iShares Russell 2000 ETF | +12.3% | +71.3% | +29.0% | +158% | 0/5 short-term, 1/3 long-term |  | 0.34 |
| VIOO: Vanguard S&P Small-Cap 600 ETF | +16.9% | +60.9% | +31.7% | +165% | 3/5 short-term, 0/3 long-term |  | 0.37 |
| [IJR](https://easycompare.io/research/ijr): iShares Core S&P Small-Cap ETF | +16.7% | +60.8% | +31.5% | +164% | 3/5 short-term, 0/3 long-term |  | 0.37 |
| SPSM: State Street SPDR Portfolio S&P 600 Small Cap ETF | +16.8% | +61.1% | +32.2% | +163% | 3/5 short-term, 0/3 long-term |  | 0.37 |
| SLYV: State Street SPDR S&P 600 Small Cap Value ETF | +19.0% | +61.7% | +35.4% | +153% | 3/5 short-term, 0/3 long-term |  | 0.39 |
| IJS: iShares S&P Small-Cap 600 Value ETF | +18.9% | +61.6% | +34.7% | +150% | 3/5 short-term, 0/3 long-term |  | 0.39 |
| SLYG: State Street SPDR S&P 600 Small Cap Growth ETF | +14.4% | +58.9% | +27.1% | +169% | 2/5 short-term, 0/3 long-term |  | 0.33 |
| IJT: iShares S&P Small-Cap 600 Growth ETF | +14.4% | +58.7% | +26.7% | +167% | 2/5 short-term, 0/3 long-term |  | 0.33 |
| CSB: VictoryShares US Small Cap High Div Volatility Wtd ETF | +13.3% | +48.9% | +27.1% | +148% | 1/5 short-term, 0/3 long-term |  | 0.35 |
| VSS: Vanguard FTSE All-World ex-US Small-Cap ETF | +10.0% | +65.4% | +27.5% | +105% | 1/5 short-term, 0/3 long-term |  | 0.38 |
| SMDV: ProShares S&P SmallCap 600 Dividend Aristocrats ETF | +12.1% | +46.3% | +29.7% | +97.4% | 1/5 short-term, 0/3 long-term |  | 0.38 |
| [VBK](https://easycompare.io/research/vbk): Vanguard Morningstar Small-Cap Growth ETF | +9.7% | +66.3% | +17.3% | +177% | 0/5 short-term, 0/3 long-term |  | 0.25 |

### How did VB do year by year?

This table shows each investment's total return in every full calendar year since 2005, along with where VB ranked among its popular alternatives each year.

- VB finished ahead of the S&P 500 in eight of its 21 full calendar years, and behind it in each of the last three.
- Among its popular alternatives, QUAL came out ahead of VB most often, in nine of the 12 years both traded.
- Ranked against its popular alternatives each year, VB finished in the top quarter in two of 21 years and in the bottom quarter in no. In 2025, it ranked 12 of 23.

| Year | VB | SPY |
| --- | --- | --- |
| 2025 | +8.9% | +17.7% |
| 2024 | +14.2% | +24.9% |
| 2023 | +18.2% | +26.2% |
| 2022 | −17.5% | −18.2% |
| 2021 | +17.6% | +28.7% |
| 2020 | +19.2% | +18.3% |
| 2019 | +27.3% | +31.2% |
| 2018 | −9.3% | −4.6% |
| 2017 | +16.3% | +21.7% |
| 2016 | +18.4% | +12.0% |

## Risk and diversification

How VB has fallen, how it held up in crashes beside the S&P 500 and its popular alternatives, and what moves independently of it.

### What were VB's worst declines?

A drawdown is the decline from a peak to the lowest point before a new high.

- In all five of VB's worst declines, the S&P 500 held up better over the same dates.
- The slowest recovery came after VB fell 28.2% from November 2021 to June 2022; it did not regain that peak until July 2024, two years later.

| Decline | Peak | Low | Back at the high | SPY over the same dates | Market event |
| --- | --- | --- | --- | --- | --- |
| −60.1% | July 13, 2007 | March 9, 2009 | January 3, 2011 | −54.5% | 2008 financial crisis |
| −42.0% | February 20, 2020 | March 23, 2020 | November 9, 2020 | −33.4% | Covid crash |
| −28.3% | April 29, 2011 | October 3, 2011 | September 6, 2012 | −18.6% | 2011 euro debt crisis |
| −28.2% | November 8, 2021 | June 16, 2022 | July 16, 2024 | −21.3% | 2022 bear market |
| −25.4% | November 25, 2024 | April 8, 2025 | September 18, 2025 | −16.4% |  |

### How did VB do in stock market crashes?

This section measures how far VB, the S&P 500 and each alternative fell from peak to trough during every major market crash since 2000.

- VB fell further than the S&P 500 in seven of the nine crashes it has traded through. The clearest case was the 2011 euro debt crisis, when VB fell 26.7% and the S&P 500 fell 17.9%.
- Among its popular alternatives, SMDV held up best, falling less than VB in all six crashes they both traded through.

| Crash | Dates | VB fall | SPY fall |
| --- | --- | --- | --- |
| Dot-com bust | March 10, 2000 to October 9, 2002 | not trading | −47.5% |
| Global financial crisis | October 9, 2007 to March 9, 2009 | −59.7% | −55.2% |
| Flash crash | May 6, 2010 to May 7, 2010 | −2.5% | −1.5% |
| Euro debt crisis | July 22, 2011 to October 3, 2011 | −26.7% | −17.9% |
| China devaluation & oil rout | August 10, 2015 to February 11, 2016 | −20.5% | −12.8% |
| Volmageddon | February 2, 2018 to February 9, 2018 | −5.9% | −6.5% |
| Q4 2018 selloff | September 21, 2018 to December 24, 2018 | −23.8% | −19.3% |
| COVID crash | February 19, 2020 to March 23, 2020 | −42.0% | −33.7% |
| 2022 bear market | January 4, 2022 to October 12, 2022 | −24.9% | −24.5% |
| SVB / regional bank stress | March 8, 2023 to March 13, 2023 | −7.3% | −3.4% |

### How closely does VB move with the S&P 500?

Upside capture measures how much of the S&P 500's gains an investment kept in the months the market rose, and downside capture how much of its losses it took in the months the market fell.

- Only VTI, QUAL and VO had a higher capture ratio (upside capture divided by downside capture) than VB's 0.80, out of 17 popular alternatives with the same record.
- QUAL took just 102% of the S&P 500's losses, against 120% for VB, while still keeping 98% of its gains.
- Over the past 10 years, VB captured 96% of the S&P 500's gains in rising months and 120% of its losses in falling months, with a beta of 1.13. Its share of the market's losses was larger than its share of the gains.

Measured over the past 10 years of monthly returns against SPY.

| Investment | Upside capture | Downside capture | Beta |
| --- | --- | --- | --- |
| VB: Vanguard Morningstar Small-Cap ETF (this page) | 96.0% | 120% | 1.13 |
| [QUAL](https://easycompare.io/research/qual): iShares MSCI USA Quality Factor ETF | 98.0% | 102% | 1.00 |
| [VTI](https://easycompare.io/research/vti): Vanguard Morningstar Total Stock Market ETF | 100% | 103% | 1.02 |
| [VO](https://easycompare.io/research/vo): Vanguard Morningstar Mid-Cap ETF | 91.0% | 109% | 1.05 |
| IWN: iShares Russell 2000 Value ETF | 95.0% | 126% | 1.14 |
| [VBR](https://easycompare.io/research/vbr): Vanguard Morningstar Small-Cap Value ETF | 94.0% | 119% | 1.11 |
| FNDA: Schwab Fundamental U.S. Small Company Index ETF | 97.0% | 123% | 1.16 |
| SCHA: Schwab U.S. Small-Cap ETF | 97.0% | 124% | 1.18 |
| VTWO: Vanguard Russell 2000 ETF | 98.0% | 128% | 1.17 |
| IWO: iShares Russell 2000 Growth ETF | 100% | 132% | 1.21 |
| [IWM](https://easycompare.io/research/iwm): iShares Russell 2000 ETF | 98.0% | 129% | 1.17 |
| VIOO: Vanguard S&P Small-Cap 600 ETF | 95.0% | 122% | 1.13 |
| SLYV: State Street SPDR S&P 600 Small Cap Value ETF | 96.0% | 128% | 1.16 |
| SLYG: State Street SPDR S&P 600 Small Cap Growth ETF | 93.0% | 119% | 1.11 |
| CSB: VictoryShares US Small Cap High Div Volatility Wtd ETF | 85.0% | 110% | 0.98 |
| VSS: Vanguard FTSE All-World ex-US Small-Cap ETF | 80.0% | 107% | 0.94 |
| SMDV: ProShares S&P SmallCap 600 Dividend Aristocrats ETF | 67.0% | 89.0% | 0.78 |
| [VBK](https://easycompare.io/research/vbk): Vanguard Morningstar Small-Cap Growth ETF | 99.0% | 125% | 1.17 |

### What diversifies VB?

Correlation measures how closely two investments move together, on a scale from 1 (in lockstep) through 0 (unrelated) to -1 (in opposite directions).

- Moving a fifth of the money in VB into DBMF would have cut the portfolio's volatility by 22% over the past 5 years and raised its annual return (+7.0% for VB alone, +8.1% for the mix).
- Among large ETFs, DXJ, GLD and XLE have moved largely independently of VB over the past 5 years, with correlations of 0.47 or lower, and each still earned a positive 5-year return.
- PPH made money in four of the six calendar years in which VB lost money.

| Investment | Correlation with VB | 5Y return | Volatility | Sharpe | Rose in VB's 6 down years |
| --- | --- | --- | --- | --- | --- |
| DXJ: WisdomTree Japan Hedged Equity Fund | 0.47 | +225% | 19.1% | 1.34 | 2 of 6 |
| [GLD](https://easycompare.io/research/gld): SPDR Gold Shares | 0.15 | +126% | 18.9% | 0.96 | 3 of 6 |
| [XLE](https://easycompare.io/research/xle): State Street Energy Select Sector SPDR ETF | 0.38 | +177% | 25.5% | 0.93 | 3 of 6 |
| DBMF: iMGP DBi Managed Futures Strategy ETF | -0.20 | +59.7% | 12.4% | 0.82 | 1 of 6 |
| DBA: Invesco DB Agriculture Fund | 0.21 | +66.4% | 13.8% | 0.81 | 1 of 6 |
| PPH: VanEck Pharmaceutical ETF | 0.49 | +72.8% | 15.8% | 0.78 | 4 of 6 |
| GDX: VanEck Gold Miners ETF | 0.29 | +181% | 38.2% | 0.73 | 1 of 6 |
| USO: United States Oil Fund, LP | -0.02 | +176% | 37.7% | 0.73 | 2 of 6 |

## Common questions

### What was VB's worst drawdown?

VB's deepest decline since it began trading in 2004 was 60.1%, from July 2007 to March 2009. It took 22 months from the low to climb back to its old high. Because VB launched in January 2004, that record does not include the dot-com bust.

### What were VB's best and worst years?

Over 21 full calendar years, VB's best year was 2013, when it returned 37.7%. Its worst was 2008, with a return of -36.2%.

### Is there a better investment than VB?

Among VB's popular alternatives, VTI earned more than VB with less volatility over the past 5 years: 11.5% a year at 17.5% volatility, against 6.2% a year at 20.6%. Looking beyond its popular alternatives, VTV (US large-cap value) and DIA (US large-cap equity) earned more than VB with less volatility over the past 5 years. VTV returned 12.1% a year at 13.7% volatility, against 6.2% a year at 20.6%.

### Is VB more volatile than the S&P 500?

Yes. VB's volatility over the past 5 years was 20.6%, 1.2 times the S&P 500's 17.1%. Volatility measures how widely returns swing around their average: in roughly two years out of three, VB's return lands within 20.6% of its average, either way. The higher it is, the rougher the ride and the harder it is to hold through a slump.

### What is VB's Sharpe ratio?

VB's Sharpe ratio over the past 5 years was 0.40, against 0.79 for the S&P 500, so VB earned less for each unit of risk than an index fund did. The Sharpe ratio is the return earned above cash for each unit of volatility: two investments with the same return are not equal if one got there with far bigger swings.

### How correlated is VB with the S&P 500?

Over the past 5 years, VB's monthly returns had a correlation of 0.87 with the S&P 500. Correlation runs from 1 (moving in lockstep) through 0 (unrelated) to −1 (moving in opposite directions). They move almost in lockstep, so holding both adds little diversification. In the table, the correlation column measures each option against VB instead: the lower it is, the more that option would diversify a VB holding.

### What are the best alternatives to VB?

Of the 26 popular alternatives we compared, five outperformed VB in at least 3 of 5 short-term and 2 of 3 long-term timeframes, with dividends reinvested: QUAL, VTI and VO.

### Did VB outperform the S&P 500?

VB finished ahead of the S&P 500 (SPY) in eight of 21 full calendar years. In 2025, it returned +8.9%, against +17.7% for the index.

### How did VB do in stock market crashes?

VB fell less than the S&P 500 (SPY) in one of the nine major crashes it has traded through, and further in seven. The clearest case was the 2011 euro debt crisis, when VB fell 26.7% and the S&P 500 fell 17.9%.

### What diversifies VB?

These had a low correlation with VB over the past 5 years and still earned a positive 5-year return: among large ETFs, DXJ (correlation 0.47), GLD (correlation 0.15) and XLE (correlation 0.38); among large stocks, CAH (correlation 0.35), CLS (correlation 0.46) and MCK (correlation 0.24). A correlation near zero means the two have moved largely independently.

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## Explore further

- Full page with charts: https://easycompare.io/research/vb
- All research pages: https://easycompare.io/llms.txt
- Compare the entire market against VB live: https://betterthanspy.com/?b=VB&utm_source=easycompare&utm_medium=research