Value vs Growth — What 76 Vanguard ETFs Reveal About Rate Cycle Winners

I tested all 76 qualifying Vanguard ETFs. Put $10,000 into each one and compared one-year and five-year returns.

The most surprising finding wasn't any single return number. It was how dramatically the same group of companies — same size, same five years — could diverge based on a single variable: style. Value versus growth. One word, thousands of dollars of difference.

Midcaps, small caps, large caps — the pattern held across every segment. Value dominated the five-year window. Growth staged a comeback in the one-year window. One rate cycle flipped winners and losers completely.

Midcaps: Where Value Quietly Dominated

Most investors skip midcaps entirely. Not big enough to be headline names, not small enough to be exciting bets. But the returns were anything but boring.

Out of seven Vanguard midcap ETFs, the five-year winner was VOE, the Midcap Value ETF. $10,000 turned into $17,300 — an 11.2% average annual return. Second place went to IVOV at $16,120. Third, IVO at $15,386. All three top performers were value funds.

At the bottom sat VXF, the extended market ETF, at just $12,915. The name sounds like you're getting broader exposure — and you are. Including the parts that dragged performance down.

Now flip to the one-year table and the picture reverses. A growth fund that ranked fifth over five years jumped to first. VOE trailed closely at $11,966. The one-year gap between them: less than $100. The five-year gap: over $2,400. Same seven funds, completely different story depending on when you zoom in.

Small Caps: The Widest Spread in the Entire Competition

The value-versus-growth gap in small caps was the widest I found across every segment tested.

The five-year champion was VBR, the Small Cap Value ETF — $10,000 grew to $16,149. At the bottom, VTWG landed at $11,215. Nearly $5,000 between them. Same-size companies, same five years, just one style difference.

The structural reason is straightforward. Small companies carry more debt than large ones, and much of it is floating rate. When the Fed raised rates, borrowing costs jumped immediately. Value companies had the earnings to absorb the hit. Growth companies did not.

But over one year? VTWG — the worst five-year performer — surged to third place with a 21.95% return. The Fed started signaling rate cuts, and small-cap growth reacted fastest of all.

Large Caps: Neither VOO Nor VTI Won

Sixteen Vanguard large-cap ETFs compete in this segment, and this is where VOO and VTI live. The five-year winner was MGC, the Mega Cap ETF — $10,000 became $19,760. VOO came in fifth at $19,381. VTI ranked even lower at $18,165.

MGC's edge comes from concentration. It holds roughly 185 stocks, putting far more weight on Apple, Microsoft, Nvidia, and Amazon. These companies sit on mountains of cash. They don't need to borrow. Rate hikes barely touched them.

The one-year table flipped again. VT, the Total World Stock ETF, took first with a 25.05% return. The fund that finished last over five years won the one-year race. Deep red in the five-year column, bright green in the one-year column.

Factor ETFs: The Fund Nobody Knows That Beat VOO

Vanguard offers five factor ETFs that most investors have never heard of. These funds pick stocks based on traits like momentum, value, quality, or a blend of all three.

The five-year champion was VFMF, the US Multifactor ETF — $10,000 became $19,466. That edges out VOO's $19,381. A fund with almost zero name recognition outperformed the fund millions of people buy every month.

Returns don't care about popularity. The best performance can come from the places that get the least attention.

What the Rate Cycle Taught Us

Segment	5yr Value Leader	5yr Growth Laggard	Gap
Midcap	VOE $17,300	VXF $12,915	$4,385
Small cap	VBR $16,149	VTWG $11,215	$4,934
Large cap	MGC $19,760	VT $17,272	$2,488

The last five years belonged to value. When rates rise, companies priced on future earnings take the hardest hit. Companies already generating cash flows hold up.

But as the one-year tables showed, once rate-cut signals emerge, growth snaps back fastest. Same funds, completely different rankings depending on the time window.

The core lesson: whoever is winning right now is not guaranteed to be winning five years from now. Rate cycles turn, and leadership rotates. And when it rotates, it rotates hard.