The iShares Russell 1000 Value ETF (IWD) and the Vanguard Total International Stock Index Fund ETF Shares (VXUS) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and VXUS is a Vanguard Foreign Large Blend fund. So, what’s the difference between IWD and VXUS? And which fund is better?
The expense ratio of IWD is 0.11 percentage points higher than VXUS’s (0.19% vs. 0.08%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided higher returns than VXUS over the past ten years.
In this article, we’ll compare IWD vs. VXUS. We’ll look at performance and annual returns, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss IWD’s and VXUS’s risk metrics, industry exposure, and fund composition and examine how these affect their overall returns.
Summary
| IWD | VXUS | |
| Name | iShares Russell 1000 Value ETF | Vanguard Total International Stock Index Fund ETF Shares |
| Category | Large Value | Foreign Large Blend |
| Issuer | iShares | Vanguard |
| AUM | 54.1B | 404.73B |
| Avg. Return | 11.40% | 8.41% |
| Div. Yield | 1.57% | 2.44% |
| Expense Ratio | 0.19% | 0.08% |
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.
IWD’s dividend yield is 0.87% lower than that of VXUS (1.57% vs. 2.44%). Also, IWD yielded on average 2.99% more per year over the past decade (11.40% vs. 8.41%). The expense ratio of IWD is 0.11 percentage points higher than VXUS’s (0.19% vs. 0.08%).
Fund Composition
Industry Exposure
| IWD | VXUS | |
| Technology | 10.28% | 13.07% |
| Industrials | 11.77% | 12.94% |
| Energy | 4.76% | 4.55% |
| Communication Services | 8.67% | 7.06% |
| Utilities | 4.88% | 2.94% |
| Healthcare | 17.78% | 9.19% |
| Consumer Defensive | 7.76% | 7.83% |
| Real Estate | 4.94% | 3.79% |
| Financial Services | 20.43% | 17.64% |
| Consumer Cyclical | 5.62% | 12.64% |
| Basic Materials | 3.1% | 8.37% |
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.
VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.
IWD is 2.79% more exposed to the Financial Services sector than VXUS (20.43% vs 17.64%). IWD’s exposure to Healthcare and Industrials stocks is 8.59% higher and 1.17% lower respectively (17.78% vs. 9.19% and 11.77% vs. 12.94%). In total, Energy, Utilities, and Real Estate also make up 3.30% more of the fund’s holdings compared to VXUS (14.58% vs. 11.28%).
Holdings
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
| VXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.62% |
| Tencent Holdings Ltd | 1.41% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.26% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.05% |
| ASML Holding NV | 0.86% |
| Roche Holding AG | 0.81% |
| Toyota Motor Corp | 0.67% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.61% |
| Novartis AG | 0.6% |
VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
Risk Analysis
| IWD | VXUS | |
| Mean Return | 1.03 | 0.56 |
| R-squared | 92.38 | 98.39 |
| Std. Deviation | 14.35 | 15.12 |
| Alpha | -3.23 | 0.31 |
| Beta | 1.02 | 0.99 |
| Sharpe Ratio | 0.81 | 0.4 |
| Treynor Ratio | 11.06 | 5.14 |
The iShares Russell 1000 Value ETF (IWD) has a R-squared of 92.38 with a Sharpe Ratio of 0.81 and a Mean Return of 1.03. Its Treynor Ratio is 11.06 while IWD’s Alpha is -3.23. Furthermore, the fund has a Standard Deviation of 14.35 and a Beta of 1.02.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Mean Return of 0.56 with a R-squared of 98.39 and a Sharpe Ratio of 0.4. Its Alpha is 0.31 while VXUS’s Beta is 0.99. Furthermore, the fund has a Treynor Ratio of 5.14 and a Standard Deviation of 15.12.
IWD’s Mean Return is 0.47 points higher than that of VXUS and its R-squared is 6.01 points lower. With a Standard Deviation of 14.35, IWD is slightly less volatile than VXUS. The Alpha and Beta of IWD are 3.54 points lower and 0.03 points higher than VXUS’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | VXUS |
| 2020 | 2.67% | 11.32% |
| 2019 | 26.34% | 21.58% |
| 2018 | -8.4% | -14.42% |
| 2017 | 13.47% | 27.52% |
| 2016 | 17.09% | 4.72% |
| 2015 | -3.95% | -4.28% |
| 2014 | 13.21% | -4.17% |
| 2013 | 32.18% | 15.16% |
| 2012 | 17.28% | 18.22% |
| 2011 | 0.21% | 0.0% |
| 2010 | 15.3% | 0.0% |
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% respectively.
The year 2017 was the strongest year for VXUS, returning 27.52% on an annual basis. The poorest year for VXUS in the last ten years was 2018, with a yield of -14.42%. Most years the Vanguard Total International Stock Index Fund ETF Shares has given investors modest returns, such as in 2010, 2016, and 2020, when gains were 0.0%, 4.72%, and 11.32% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWD | $10,000 | $26,610 | 11.40% |
| VXUS | $10,000 | $19,315 | 8.41% |
A $10,000 investment in IWD would have resulted in a final balance of $26,610. This is a profit of $16,610 over 9 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
With a $10,000 investment in VXUS, the end total would have been $19,315. This equates to a $9,315 profit over 9 years and a compound annual growth rate (CAGR) of 8.41%.
IWD’s CAGR is 2.99 percentage points higher than that of VXUS and as a result, would have yielded $7,295 more on a $10,000 investment. Thus, IWD outperformed VXUS by 2.99% annually.
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