ACWI vs. VOE: What’s The Difference?

The iShares MSCI ACWI ETF (ACWI) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. ACWI is a iShares N/A fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between ACWI and VOE? And which fund is better?

The expense ratio of ACWI is 0.25 percentage points higher than VOE’s (0.32% vs. 0.07%). ACWI also has a higher exposure to the technology sector and a lower standard deviation. Overall, ACWI has provided lower returns than VOE over the past 11 years.

In this article, we’ll compare ACWI vs. VOE. We’ll look at annual returns and fund composition, as well as at their performance and holdings. Moreover, I’ll also discuss ACWI’s and VOE’s industry exposure, risk metrics, and portfolio growth and examine how these affect their overall returns.

Summary

ACWI VOE
Name iShares MSCI ACWI ETF Vanguard Mid-Cap Value Index Fund ETF Shares
Category N/A Mid-Cap Value
Issuer iShares Vanguard
AUM 16.85B 26.78B
Avg. Return 10.21% 12.52%
Div. Yield 1.39% 1.87%
Expense Ratio 0.32% 0.07%

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

ACWI’s dividend yield is 0.48% lower than that of VOE (1.39% vs. 1.87%). Also, ACWI yielded on average 2.31% less per year over the past decade (10.21% vs. 12.52%). The expense ratio of ACWI is 0.25 percentage points higher than VOE’s (0.32% vs. 0.07%).

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Fund Composition

Industry Exposure

ACWI vs. VOE - Industry Exposure

ACWI VOE
Technology 20.41% 9.85%
Industrials 9.65% 9.4%
Energy 3.48% 5.69%
Communication Services 9.87% 5.27%
Utilities 2.61% 10.93%
Healthcare 11.74% 7.04%
Consumer Defensive 7.15% 4.85%
Real Estate 2.75% 11.48%
Financial Services 15.58% 18.26%
Consumer Cyclical 12.01% 11.8%
Basic Materials 4.73% 5.44%

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

ACWI is 10.56% more exposed to the Technology sector than VOE (20.41% vs 9.85%). ACWI’s exposure to Financial Services and Consumer Cyclical stocks is 2.68% lower and 0.21% higher respectively (15.58% vs. 18.26% and 12.01% vs. 11.8%). In total, Real Estate, Energy, and Basic Materials also make up 11.65% less of the fund’s holdings compared to VOE (10.96% vs. 22.61%).

Holdings

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
JPMorgan Chase & Co 0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

VOE - Holdings

VOE Holdings Weight
Carrier Global Corp Ordinary Shares 1.28%
International Flavors & Fragrances Inc 1.13%
Motorola Solutions Inc 1.12%
Discover Financial Services 1.09%
Welltower Inc 1.05%
Corteva Inc 0.99%
Valero Energy Corp 0.97%
Corning Inc 0.95%
Willis Towers Watson PLC 0.9%
D.R. Horton Inc 0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

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Risk Analysis

ACWI VOE
Mean Return 0.89 1.05
R-squared 99.96 88.76
Std. Deviation 14.05 15.98
Alpha 0.15 -3.77
Beta 1 1.11
Sharpe Ratio 0.71 0.75
Treynor Ratio 9.45 10.19

The iShares MSCI ACWI ETF (ACWI) has a R-squared of 99.96 with a Mean Return of 0.89 and a Treynor Ratio of 9.45. Its Standard Deviation is 14.05 while ACWI’s Beta is 1. Furthermore, the fund has a Sharpe Ratio of 0.71 and a Alpha of 0.15.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Standard Deviation of 15.98 with a R-squared of 88.76 and a Sharpe Ratio of 0.75. Its Mean Return is 1.05 while VOE’s Treynor Ratio is 10.19. Furthermore, the fund has a Beta of 1.11 and a Alpha of -3.77.

ACWI’s Mean Return is 0.16 points lower than that of VOE and its R-squared is 11.20 points higher. With a Standard Deviation of 14.05, ACWI is slightly less volatile than VOE. The Alpha and Beta of ACWI are 3.92 points higher and 0.11 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

ACWI vs. VOE - Annual Returns

Year ACWI VOE
2020 16.38% 2.5%
2019 26.7% 27.98%
2018 -9.15% -12.41%
2017 24.35% 17.05%
2016 8.22% 15.26%
2015 -2.39% -1.8%
2014 4.64% 13.98%
2013 22.91% 37.65%
2012 15.99% 16.04%
2011 -7.6% -0.32%
2010 12.31% 21.83%

ACWI had its best year in 2019 with an annual return of 26.7%. ACWI’s worst year over the past decade yielded -9.15% and occurred in 2018. In most years the iShares MSCI ACWI ETF provided moderate returns such as in 2016, 2010, and 2012 where annual returns amounted to 8.22%, 12.31%, and 15.99% respectively.

The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

ACWI vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
ACWI $10,000 $27,241 10.21%
VOE $10,000 $33,655 12.52%

A $10,000 investment in ACWI would have resulted in a final balance of $27,241. This is a profit of $17,241 over 11 years and amounts to a compound annual growth rate (CAGR) of 10.21%.

With a $10,000 investment in VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.

ACWI’s CAGR is 2.31 percentage points lower than that of VOE and as a result, would have yielded $6,414 less on a $10,000 investment. Thus, ACWI performed worse than VOE by 2.31% annually.


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