The iShares Core MSCI Total International Stock ETF (IXUS) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between IXUS and VGK? And which fund is better?
The expense ratio of IXUS is 0.01 percentage points higher than VGK’s (0.09% vs. 0.08%). IXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IXUS has provided lower returns than VGK over the past ten years.
In this article, we’ll compare IXUS vs. VGK. We’ll look at annual returns and portfolio growth, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss IXUS’s and VGK’s risk metrics, holdings, and performance and examine how these affect their overall returns.
Summary
| IXUS | VGK | |
| Name | iShares Core MSCI Total International Stock ETF | Vanguard FTSE Europe Index Fund ETF Shares |
| Category | Foreign Large Blend | Europe Stock |
| Issuer | iShares | Vanguard |
| AUM | 29.54B | 25.7B |
| Avg. Return | 6.09% | 6.68% |
| Div. Yield | 2.13% | 2.52% |
| Expense Ratio | 0.09% | 0.08% |
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 Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
IXUS’s dividend yield is 0.39% lower than that of VGK (2.13% vs. 2.52%). Also, IXUS yielded on average 0.59% less per year over the past decade (6.09% vs. 6.68%). The expense ratio of IXUS is 0.01 percentage points higher than VGK’s (0.09% vs. 0.08%).
Fund Composition
Industry Exposure
| IXUS | VGK | |
| Technology | 13.24% | 8.3% |
| Industrials | 12.78% | 15.58% |
| Energy | 4.39% | 4.3% |
| Communication Services | 7.09% | 5.09% |
| Utilities | 2.95% | 3.89% |
| Healthcare | 9.29% | 13.76% |
| Consumer Defensive | 8.19% | 11.39% |
| Real Estate | 3.66% | 2.57% |
| Financial Services | 17.34% | 15.85% |
| Consumer Cyclical | 12.57% | 11.6% |
| Basic Materials | 8.5% | 7.67% |
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 Vanguard FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
IXUS is 1.49% more exposed to the Financial Services sector than VGK (17.34% vs 15.85%). IXUS’s exposure to Technology and Industrials stocks is 4.94% higher and 2.80% lower respectively (13.24% vs. 8.3% and 12.78% vs. 15.58%). In total, Real Estate, Energy, and Communication Services also make up 3.18% more of the fund’s holdings compared to VGK (15.14% vs. 11.96%).
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%.
| VGK Holdings | Weight |
| Nestle SA | 2.82% |
| ASML Holding NV | 2.2% |
| Roche Holding AG | 2.13% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.58% |
| Novartis AG | 1.55% |
| AstraZeneca PLC | 1.27% |
| SAP SE | 1.25% |
| Unilever PLC | 1.23% |
| Novo Nordisk A/S B | 1.09% |
| Siemens AG | 0.96% |
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
Risk Analysis
| IXUS | VGK | |
| Mean Return | 0 | 0.61 |
| R-squared | 0 | 92.76 |
| Std. Deviation | 0 | 16.65 |
| Alpha | 0 | 0.45 |
| Beta | 0 | 1.06 |
| Sharpe Ratio | 0 | 0.4 |
| Treynor Ratio | 0 | 5.12 |
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Beta is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Standard Deviation of 0.
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a R-squared of 92.76 with a Beta of 1.06 and a Treynor Ratio of 5.12. Its Mean Return is 0.61 while VGK’s Sharpe Ratio is 0.4. Furthermore, the fund has a Standard Deviation of 16.65 and a Alpha of 0.45.
IXUS’s Mean Return is 0.61 points lower than that of VGK and its R-squared is 92.76 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than VGK. The Alpha and Beta of IXUS are 0.45 points lower and 1.06 points lower than VGK’s Alpha and Beta.
Performance
Annual Returns
| Year | IXUS | VGK |
| 2020 | 11.14% | 6.5% |
| 2019 | 21.85% | 24.26% |
| 2018 | -14.55% | -14.79% |
| 2017 | 28.08% | 27.06% |
| 2016 | 4.66% | -0.59% |
| 2015 | -4.62% | -1.87% |
| 2014 | -3.96% | -6.56% |
| 2013 | 15.85% | 24.93% |
| 2012 | 0.0% | 21.01% |
| 2011 | 0.0% | -11.49% |
| 2010 | 0.0% | 5.01% |
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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IXUS | $10,000 | $14,209 | 6.09% |
| VGK | $10,000 | $13,060 | 6.68% |
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 VGK, the end total would have been $13,060. This equates to a $3,060 profit over 7 years and a compound annual growth rate (CAGR) of 6.68%.
IXUS’s CAGR is 0.59 percentage points lower than that of VGK and as a result, would have yielded $1,149 more on a $10,000 investment. Thus, IXUS performed worse than VGK by 0.59% annually.
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