VB vs VEA: Which ETF Is Better in 2026?
A metric-by-metric comparison of Vanguard Small-Cap Index Fund ETF Shares (VB) and Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) — both US Small Cap / International Developed funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 26, 2026. ~5 minute read.
The Verdict
VB (US Small Cap) and VEA (International Developed) sit in different corners of the market, so this is less a head-to-head than a question of what role each would play. They can be complements rather than alternatives — the metrics below show how differently the two have actually behaved.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VEA scores higher: 80.9 (Grade B+) versus 68.4 for VB. That doesn't make VB a bad fund; it means VEA currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| VB | VEA | |
|---|---|---|
| Category | US Small Cap | International Developed |
| Expense ratio | 0.03% | 0.03% |
| Fund size (AUM) | $188.6B | $316.3B |
| Dividend yield | 0.87% | 2.54% |
| 1-year return | +22.03% | +25.35% |
| 3-year return | +48.64% | +60.87% |
| Volatility | 16.43% | 17.16% |
| Max drawdown | -25.36% | -13.45% |
| Sharpe ratio | 1.04 | 1.19 |
| ETFValuer score | 68.4 | 80.9 |
| Grade | B | B+ |
| Overall rank | #131 | #14 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — VB charges 0.03% a year versus VEA's 0.03%. A difference this small (about $0.00 a year on a $10,000 position) isn't a reason to choose one fund over the other.
What VB's Fees Cost You
VB charges an expense ratio of 0.03% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, VEA returned +60.87% versus +48.64% for VB — a gap of about 12.2 percentage points. On risk, VEA has held up better historically, with a shallower max drawdown (-13.45% vs. -25.36%). VEA currently has the better risk-adjusted return (Sharpe ratio of 1.19 vs. 1.04), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), VB and VEA show a strong correlation of 0.757 — clearly related, with room to diverge. There is some genuine differentiation here, but not enough to call these complementary holdings. Pairing them mostly concentrates risk rather than spreading it.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.757 | Strong — clearly related, with room to diverge |
| R-squared | 57.3% | 57.3% of VB's daily moves are explained by VEA's |
| Tracking error (annualised) | 12.42% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | VB +14.50% · VEA +17.43% | VEA ahead by 2.93 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, VB finished as much as +25.8 points ahead of VEA at the best extreme and -28.6 points at the worst — a 54.4-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
VB and VEA hold 1 of the same companies among their top 10 positions. Those shared names make up 1.1% of VB and 1.1% of VEA. That's modest duplication — the funds are mostly distinct at the top, so holding both can still add diversification.
| Shared Holding | VB Weight | VEA Weight |
|---|---|---|
| Vanguard Cmt Funds-Vanguard Market Liquidity Fund | 1.11% | 1.07% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean VB if…
- You have no strong preference — VB is a perfectly reasonable default here
Lean VEA if…
- Current income matters to you — it yields 2.54% against 0.87%
- You care about return per unit of risk — its Sharpe ratio of 1.19 beats 1.04
- You weight recent results heavily — it returned 60.9% over 3 years against 48.6%
These two are not really substitutes, so "both, in some proportion" is often the right answer rather than picking one. Model the blend with the Portfolio Blender.
Frequently Asked Questions
Is VB or VEA better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VEA scores higher: 80.9 (Grade B+) versus 68.4 for VB. That doesn't make VB a bad fund; it means VEA currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, VB or VEA?
VEA currently has the lower expense ratio (0.03% vs. 0.03%).
Can I hold both VB and VEA?
Yes, and it may be worth doing. VB and VEA correlate at only 0.76 over the past 3.0 years, so they behave differently enough that holding both is a genuine diversification decision rather than a redundant one. Size each to the role you want it to play.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.