The iShares Core MSCI Total International Stock ETF (IXUS) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between IXUS and DFAC? And which fund is better?
The expense ratio of IXUS is 0.10 percentage points lower than DFAC’s (0.09% vs. 0.19%). IXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IXUS has provided lower returns than DFAC over the past ten years.
In this article, we’ll compare IXUS vs. DFAC. We’ll look at holdings and risk metrics, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss IXUS’s and DFAC’s fund composition, portfolio growth, and performance and examine how these affect their overall returns.
Summary
| IXUS | DFAC | |
| Name | iShares Core MSCI Total International Stock ETF | Dimensional U.S. Core Equity 2 ETF |
| Category | Foreign Large Blend | Large Blend |
| Issuer | iShares | Dimensional Fund Advisors |
| AUM | 29.54B | 13.53B |
| Avg. Return | 6.09% | 13.93% |
| Div. Yield | 2.13% | 1.0% |
| Expense Ratio | 0.09% | 0.19% |
The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
IXUS’s dividend yield is 1.13% higher than that of DFAC (2.13% vs. 1.0%). Also, IXUS yielded on average 7.85% less per year over the past decade (6.09% vs. 13.93%). The expense ratio of IXUS is 0.10 percentage points lower than DFAC’s (0.09% vs. 0.19%).
Fund Composition
Industry Exposure
| IXUS | DFAC | |
| Technology | 13.24% | 22.81% |
| Industrials | 12.78% | 14.13% |
| Energy | 4.39% | 2.67% |
| Communication Services | 7.09% | 7.63% |
| Utilities | 2.95% | 1.54% |
| Healthcare | 9.29% | 12.09% |
| Consumer Defensive | 8.19% | 5.94% |
| Real Estate | 3.66% | 0.37% |
| Financial Services | 17.34% | 16.17% |
| Consumer Cyclical | 12.57% | 13.09% |
| Basic Materials | 8.5% | 3.56% |
The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.
IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
IXUS is 1.17% more exposed to the Financial Services sector than DFAC (17.34% vs 16.17%). IXUS’s exposure to Technology and Industrials stocks is 9.57% lower and 1.35% lower respectively (13.24% vs. 22.81% and 12.78% vs. 14.13%). In total, Real Estate, Energy, and Communication Services also make up 4.47% more of the fund’s holdings compared to DFAC (15.14% vs. 10.67%).
Holdings
| IXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.64% |
| Tencent Holdings Ltd | 1.35% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.34% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.06% |
| ASML Holding NV | 0.9% |
| Roche Holding AG | 0.81% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.67% |
| Novartis AG | 0.62% |
| Toyota Motor Corp | 0.59% |
IXUS’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 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.
ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.
| DFAC Holdings | Weight |
| Apple Inc | 4.7% |
| Microsoft Corp | 3.81% |
| Amazon.com Inc | 2.39% |
| Johnson & Johnson | 1.05% |
| Facebook Inc Class A | 1.05% |
| JPMorgan Chase & Co | 1.0% |
| Alphabet Inc Class C | 0.85% |
| Alphabet Inc Class A | 0.84% |
| Berkshire Hathaway Inc Class B | 0.75% |
| Visa Inc Class A | 0.74% |
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
Risk Analysis
| IXUS | DFAC | |
| Mean Return | 0 | 1.19 |
| R-squared | 0 | 95.1 |
| Std. Deviation | 0 | 15.55 |
| Alpha | 0 | -2.75 |
| Beta | 0 | 1.12 |
| Sharpe Ratio | 0 | 0.88 |
| Treynor Ratio | 0 | 11.85 |
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a R-squared of 0 and a Beta of 0. Its Mean Return is 0 while IXUS’s Standard Deviation is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Beta of 1.12 with a Standard Deviation of 15.55 and a Mean Return of 1.19. Its Treynor Ratio is 11.85 while DFAC’s Sharpe Ratio is 0.88. Furthermore, the fund has a Alpha of -2.75 and a R-squared of 95.1.
IXUS’s Mean Return is 1.19 points lower than that of DFAC and its R-squared is 95.10 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than DFAC. The Alpha and Beta of IXUS are 2.75 points higher and 1.12 points lower than DFAC’s Alpha and Beta.
Performance
Annual Returns
| Year | IXUS | DFAC |
| 2020 | 11.14% | 15.8% |
| 2019 | 21.85% | 29.54% |
| 2018 | -14.55% | -9.43% |
| 2017 | 28.08% | 18.82% |
| 2016 | 4.66% | 16.31% |
| 2015 | -4.62% | -2.53% |
| 2014 | -3.96% | 9.56% |
| 2013 | 15.85% | 37.55% |
| 2012 | 0.0% | 17.93% |
| 2011 | 0.0% | -1.96% |
| 2010 | 0.0% | 21.67% |
IXUS had its best year in 2017 with an annual return of 28.08%. IXUS’s worst year over the past decade yielded -14.55% and occurred in 2018. In most years the iShares Core MSCI Total International Stock ETF provided moderate returns such as in 2011, 2010, and 2016 where annual returns amounted to 0.0%, 0.0%, and 4.66% respectively.
The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IXUS | $10,000 | $14,209 | 6.09% |
| DFAC | $10,000 | $20,050 | 13.93% |
A $10,000 investment in IXUS would have resulted in a final balance of $14,209. This is a profit of $4,209 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.09%.
With a $10,000 investment in DFAC, the end total would have been $20,050. This equates to a $10,050 profit over 7 years and a compound annual growth rate (CAGR) of 13.93%.
IXUS’s CAGR is 7.85 percentage points lower than that of DFAC and as a result, would have yielded $5,841 less on a $10,000 investment. Thus, IXUS performed worse than DFAC by 7.85% annually.
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