The iShares Core MSCI Total International Stock ETF (IXUS) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between IXUS and VT? And which fund is better?
The expense ratio of IXUS is 0.01 percentage points higher than VT’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 VT over the past ten years.
In this article, we’ll compare IXUS vs. VT. We’ll look at fund composition and risk metrics, as well as at their holdings and industry exposure. Moreover, I’ll also discuss IXUS’s and VT’s portfolio growth, performance, and annual returns and examine how these affect their overall returns.
|NameiShares Core MSCI Total International Stock ETFVanguard Total World Stock Index Fund ETF Shares|
|Category||Foreign Large Blend||N/A|
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
IXUS’s dividend yield is 0.48% higher than that of VT (2.13% vs. 1.65%). Also, IXUS yielded on average 4.33% less per year over the past decade (6.09% vs. 10.42%). The expense ratio of IXUS is 0.01 percentage points higher than VT’s (0.09% vs. 0.08%).
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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 Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
IXUS is 1.98% more exposed to the Financial Services sector than VT (17.34% vs 15.36%). IXUS’s exposure to Technology and Industrials stocks is 6.39% lower and 2.08% higher respectively (13.24% vs. 19.63% and 12.78% vs. 10.7%). In total, Real Estate, Energy, and Communication Services also make up 1.00% less of the fund’s holdings compared to VT (15.14% vs. 16.14%).
|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||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
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The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a Sharpe Ratio of 0 and a R-squared of 0. Its Beta is 0 while IXUS’s Standard Deviation is 0. Furthermore, the fund has a Mean Return of 0 and a Treynor Ratio of 0.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Alpha of 0.2 with a Sharpe Ratio of 0.71 and a Mean Return of 0.9. Its Beta is 1.01 while VT’s R-squared is 99.35. Furthermore, the fund has a Treynor Ratio of 9.5 and a Standard Deviation of 14.19.
IXUS’s Mean Return is 0.90 points lower than that of VT and its R-squared is 99.35 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than VT. The Alpha and Beta of IXUS are 0.20 points lower and 1.01 points lower than VT’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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% 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 VT, the end total would have been $18,426. This equates to a $8,426 profit over 7 years and a compound annual growth rate (CAGR) of 10.42%.
IXUS’s CAGR is 4.33 percentage points lower than that of VT and as a result, would have yielded $4,217 less on a $10,000 investment. Thus, IXUS performed worse than VT by 4.33% annually.
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