VIG vs VO: Which ETF Is Better in 2026?
A metric-by-metric comparison of Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and Vanguard Mid-Cap Index Fund ETF Shares (VO) — both Dividend Income / US Mid Cap funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
VIG (Dividend Income) and VO (US Mid Cap) 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 — VIG scores higher: 76.9 (Grade B+) versus 66.3 for VO. That doesn't make VO a bad fund; it means VIG 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
| VIG | VO | |
|---|---|---|
| Category | Dividend Income | US Mid Cap |
| Expense ratio | 0.04% | 0.03% |
| Fund size (AUM) | $129.5B | $224.0B |
| Dividend yield | 1.51% | 3.73% |
| 1-year return | +16.43% | +13.56% |
| 3-year return | +51.43% | +48.17% |
| Volatility | 10.01% | 12.60% |
| Max drawdown | -14.95% | -19.02% |
| Sharpe ratio | 1.14 | 0.68 |
| ETFValuer score | 76.9 | 66.3 |
| Grade | B+ | B |
| Overall rank | #30 | #158 |
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 — VIG charges 0.04% a year versus VO's 0.03%. A difference this small (about $1.00 a year on a $10,000 position) isn't a reason to choose one fund over the other.
What VIG's Fees Cost You
VIG charges an expense ratio of 0.04% 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, VIG returned +51.43% versus +48.17% for VO — a gap of about 3.3 percentage points. On risk, VIG has held up better historically, with a shallower max drawdown (-14.95% vs. -19.02%). VIG currently has the better risk-adjusted return (Sharpe ratio of 1.14 vs. 0.68), 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), VIG and VO show a high correlation of 0.925 — closely related, but not identical. Holding both would add very little diversification: when one falls, the other almost always falls with it. Treat these as alternatives to each other, not as complements in the same portfolio.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.925 | High — closely related, but not identical |
| R-squared | 85.6% | 85.6% of VIG's daily moves are explained by VO's |
| Tracking error (annualised) | 5.78% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | VIG +14.75% · VO +14.03% | VIG ahead by 0.71 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, VIG finished as much as +6.8 points ahead of VO at the best extreme and -6.9 points at the worst — a 13.7-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
VIG and VO share no companies among their top 10 reported holdings. That points to genuinely different exposure, so holding both is more likely to diversify than to duplicate. Full portfolios may still overlap further down the list.
Based on the top 10 holdings in each fund's most recent SEC N-PORT-P filing.
Which One Should You Pick?
Lean VIG if…
- It has been the calmer ride (10.0% volatility vs 12.6%) with a shallower worst-case fall (-14.9% vs -19.0%)
- You care about return per unit of risk — its Sharpe ratio of 1.14 beats 0.68
- You weight recent results heavily — it returned 51.4% over 3 years against 48.2%
Lean VO if…
- You want the lower running cost — 0.03% vs 0.04%, about $1 a year less on a $10,000 position
- Current income matters to you — it yields 3.73% against 1.51%
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 VIG or VO better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VIG scores higher: 76.9 (Grade B+) versus 66.3 for VO. That doesn't make VO a bad fund; it means VIG 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, VIG or VO?
VO currently has the lower expense ratio (0.03% vs. 0.04%).
Can I hold both VIG and VO?
You can, though the benefit is limited. At a correlation of 0.93, VIG and VO fall together far more often than not, so owning both adds complexity and a second expense ratio without much real diversification. Most investors are better served picking one.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.