The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares MSCI USA Quality Factor ETF (QUAL) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and QUAL is a iShares Large Blend fund. So, what’s the difference between IXUS and QUAL? And which fund is better?
The expense ratio of IXUS is 0.06 percentage points lower than QUAL’s (0.09% vs. 0.15%). IXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IXUS has provided lower returns than QUAL over the past ten years.
In this article, we’ll compare IXUS vs. QUAL. We’ll look at portfolio growth and industry exposure, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IXUS’s and QUAL’s fund composition, annual returns, and performance and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||iShares MSCI USA Quality Factor ETF|
|Category||Foreign Large Blend||Large Blend|
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 iShares MSCI USA Quality Factor ETF (QUAL) is a Large Blend fund that is issued by iShares. It currently has 23.93B total assets under management and has yielded an average annual return of 13.42% over the past 10 years. The fund has a dividend yield of 1.29% with an expense ratio of 0.15%.
IXUS’s dividend yield is 0.84% higher than that of QUAL (2.13% vs. 1.29%). Also, IXUS yielded on average 7.34% less per year over the past decade (6.09% vs. 13.42%). The expense ratio of IXUS is 0.06 percentage points lower than QUAL’s (0.09% vs. 0.15%).
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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 iShares MSCI USA Quality Factor ETF (QUAL) has the most exposure to the Technology sector at 22.52%. This is followed by Financial Services and Healthcare at 15.87% and 13.22% respectively. Basic Materials (2.35%), Utilities (2.41%), and Real Estate (2.72%) only make up 7.48% of the fund’s total assets.
QUAL’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 8.57%, 9.22%, 9.43%, 11.44%, and 13.22%.
IXUS is 1.47% more exposed to the Financial Services sector than QUAL (17.34% vs 15.87%). IXUS’s exposure to Technology and Industrials stocks is 9.28% lower and 3.56% higher respectively (13.24% vs. 22.52% and 12.78% vs. 9.22%). In total, Real Estate, Energy, and Communication Services also make up 1.26% less of the fund’s holdings compared to QUAL (15.14% vs. 16.40%).
|Taiwan Semiconductor Manufacturing Co Ltd||1.64%|
|Tencent Holdings Ltd||1.35%|
|Alibaba Group Holding Ltd Ordinary Shares||1.34%|
|Samsung Electronics Co Ltd||1.06%|
|ASML Holding NV||0.9%|
|Roche Holding AG||0.81%|
|LVMH Moet Hennessy Louis Vuitton SE||0.67%|
|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%.
|Facebook Inc Class A||4.77%|
|Nike Inc Class B||4.05%|
|Johnson & Johnson||2.99%|
|Mastercard Inc Class A||2.72%|
|Alphabet Inc Class A||2.49%|
QUAL’s Top Holdings are Facebook Inc Class A, Nike Inc Class B, Microsoft Corp, Apple Inc, and Johnson & Johnson at 4.77%, 4.05%, 3.54%, 3.52%, and 2.99%.
BlackRock Inc (2.87%), Target Corp (2.8%), and Mastercard Inc Class A (2.72%) have a slightly smaller but still significant weight. NVIDIA Corp and Alphabet Inc Class A are also represented in the QUAL’s holdings at 2.71% and 2.49%.
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The iShares Core MSCI Total International Stock ETF (IXUS) has a R-squared of 0 with a Treynor Ratio of 0 and a Standard Deviation of 0. Its Alpha is 0 while IXUS’s Beta is 0. Furthermore, the fund has a Mean Return of 0 and a Sharpe Ratio of 0.
The iShares MSCI USA Quality Factor ETF (QUAL) has a Treynor Ratio of 0 with a Beta of 0 and a Standard Deviation of 0. Its R-squared is 0 while QUAL’s Alpha is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Mean Return of 0.
IXUS’s Mean Return is 0.00 points lower than that of QUAL and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than QUAL. The Alpha and Beta of IXUS are 0.00 points lower and 0.00 points lower than QUAL’s Alpha and Beta.
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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 2019 was the strongest year for QUAL, returning 34.14% on an annual basis. The poorest year for QUAL in the last ten years was 2018, with a yield of -5.77%. Most years the iShares MSCI USA Quality Factor ETF has given investors modest returns, such as in 2010, 2015, and 2016, when gains were 0.0%, 5.56%, and 9.18% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 QUAL, the end total would have been $23,251. This equates to a $13,251 profit over 7 years and a compound annual growth rate (CAGR) of 13.42%.
IXUS’s CAGR is 7.34 percentage points lower than that of QUAL and as a result, would have yielded $9,042 less on a $10,000 investment. Thus, IXUS performed worse than QUAL by 7.34% annually.
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