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IXUS vs. VTIP: What’s The Difference?

The iShares Core MSCI Total International Stock ETF (IXUS) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between IXUS and VTIP? And which fund is better?

The expense ratio of IXUS is 0.04 percentage points higher than VTIP’s (0.09% vs. 0.05%). IXUS also has a high exposure to the financial services sector while VTIP is mostly comprised of AAA bonds. Overall, IXUS has provided higher returns than VTIP over the past ten years.

In this article, we’ll compare IXUS vs. VTIP. We’ll look at performance and risk metrics, as well as at their annual returns and fund composition. Moreover, I’ll also discuss IXUS’s and VTIP’s portfolio growth, holdings, and industry exposure and examine how these affect their overall returns.

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Summary

IXUSVTIP
NameiShares Core MSCI Total International Stock ETFVanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares
CategoryForeign Large BlendInflation-Protected Bond
IssueriSharesVanguard
AUM29.54B50.67B
Avg. Return6.09%1.79%
Div. Yield2.13%1.35%
Expense Ratio0.09%0.05%

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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.

IXUS’s dividend yield is 0.78% higher than that of VTIP (2.13% vs. 1.35%). Also, IXUS yielded on average 4.29% more per year over the past decade (6.09% vs. 1.79%). The expense ratio of IXUS is 0.04 percentage points higher than VTIP’s (0.09% vs. 0.05%).

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Fund Composition

Holdings

IXUS - Holdings

IXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.64%
Tencent Holdings Ltd1.35%
Alibaba Group Holding Ltd Ordinary Shares1.34%
Nestle SA1.1%
Samsung Electronics Co Ltd1.06%
ASML Holding NV0.9%
Roche Holding AG0.81%
LVMH Moet Hennessy Louis Vuitton SE0.67%
Novartis AG0.62%
Toyota Motor Corp0.59%

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%.

VTIP - Holdings

VTIP Bond SectorsWeight
AAA99.87%
Others0.13%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.

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Risk Analysis

IXUSVTIP
Mean Return00
R-squared00
Std. Deviation00
Alpha00
Beta00
Sharpe Ratio00
Treynor Ratio00

The iShares Core MSCI Total International Stock ETF (IXUS) has a Standard Deviation of 0 with a Alpha of 0 and a Treynor Ratio of 0. Its Beta is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a R-squared of 0.

The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a Treynor Ratio of 0 with a Mean Return of 0 and a Alpha of 0. Its R-squared is 0 while VTIP’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a Sharpe Ratio of 0.

IXUS’s Mean Return is 0.00 points lower than that of VTIP and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than VTIP. The Alpha and Beta of IXUS are 0.00 points lower and 0.00 points lower than VTIP’s Alpha and Beta.

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Performance

Annual Returns

IXUS vs. VTIP - Annual Returns

YearIXUSVTIP
202011.14%4.97%
201921.85%4.83%
2018-14.55%0.54%
201728.08%0.82%
20164.66%2.71%
2015-4.62%-0.15%
2014-3.96%-1.17%
201315.85%-1.55%
20120.0%0.0%
20110.0%0.0%
20100.0%0.0%

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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.

Portfolio Growth

IXUS vs. VTIP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IXUS$10,000$14,2096.09%
VTIP$10,000$11,3051.79%

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 VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.

IXUS’s CAGR is 4.29 percentage points higher than that of VTIP and as a result, would have yielded $2,904 more on a $10,000 investment. Thus, IXUS outperformed VTIP by 4.29% annually.


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