The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and USMV is a iShares Large Blend fund. So, what’s the difference between IXUS and USMV? And which fund is better?
The expense ratio of IXUS is 0.06 percentage points lower than USMV’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 USMV over the past ten years.
In this article, we’ll compare IXUS vs. USMV. We’ll look at annual returns and industry exposure, as well as at their holdings and performance. Moreover, I’ll also discuss IXUS’s and USMV’s risk metrics, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||iShares MSCI USA Min Vol 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 Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
IXUS’s dividend yield is 0.63% higher than that of USMV (2.13% vs. 1.5%). Also, IXUS yielded on average 7.81% less per year over the past decade (6.09% vs. 13.89%). The expense ratio of IXUS is 0.06 percentage points lower than USMV’s (0.09% vs. 0.15%).
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 Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.
USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.
IXUS is 7.69% more exposed to the Financial Services sector than USMV (17.34% vs 9.65%). IXUS’s exposure to Technology and Industrials stocks is 7.29% lower and 2.27% higher respectively (13.24% vs. 20.53% and 12.78% vs. 10.51%). In total, Real Estate, Energy, and Communication Services also make up 1.17% more of the fund’s holdings compared to USMV (15.14% vs. 13.97%).
|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%.
|Eli Lilly and Co||1.64%|
|T-Mobile US Inc||1.51%|
|Accenture PLC Class A||1.51%|
|Visa Inc Class A||1.49%|
|Waste Management Inc||1.45%|
|The Kroger Co||1.44%|
|Johnson & Johnson||1.42%|
|Gilead Sciences Inc||1.42%|
USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.
Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Beta is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Alpha of 0.
The iShares MSCI USA Min Vol Factor ETF (USMV) has a Alpha of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its Standard Deviation is 0 while USMV’s Mean Return is 0. Furthermore, the fund has a R-squared of 0 and a Treynor Ratio of 0.
IXUS’s Mean Return is 0.00 points lower than that of USMV and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than USMV. The Alpha and Beta of IXUS are 0.00 points lower and 0.00 points lower than USMV’s Alpha and Beta.
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 USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% 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 USMV, the end total would have been $22,066. This equates to a $12,066 profit over 7 years and a compound annual growth rate (CAGR) of 13.89%.
IXUS’s CAGR is 7.81 percentage points lower than that of USMV and as a result, would have yielded $7,857 less on a $10,000 investment. Thus, IXUS performed worse than USMV by 7.81% annually.
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