The Vanguard Small-Cap Index Fund ETF Shares (VB) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. VB is a Vanguard Small Blend fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between VB and IXUS? And which fund is better?
The expense ratio of VB is 0.04 percentage points lower than IXUS’s (0.05% vs. 0.09%). VB also has a higher exposure to the technology sector and a higher standard deviation. Overall, VB has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare VB vs. IXUS. We’ll look at risk metrics and performance, as well as at their fund composition and annual returns. Moreover, I’ll also discuss VB’s and IXUS’s portfolio growth, industry exposure, and holdings and examine how these affect their overall returns.
|Name||Vanguard Small-Cap Index Fund ETF Shares||iShares Core MSCI Total International Stock ETF|
|Category||Small Blend||Foreign Large Blend|
The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 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%.
VB’s dividend yield is 0.99% lower than that of IXUS (1.14% vs. 2.13%). Also, VB yielded on average 8.17% more per year over the past decade (14.25% vs. 6.09%). The expense ratio of VB is 0.04 percentage points lower than IXUS’s (0.05% vs. 0.09%).
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The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.
VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.
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%.
VB is 3.61% more exposed to the Technology sector than IXUS (16.85% vs 13.24%). VB’s exposure to Industrials and Healthcare stocks is 3.33% higher and 5.05% higher respectively (16.11% vs. 12.78% and 14.34% vs. 9.29%). In total, Communication Services, Energy, and Consumer Defensive also make up 9.46% less of the fund’s holdings compared to IXUS (10.21% vs. 19.67%).
|Charles River Laboratories International Inc||0.34%|
|Diamondback Energy Inc||0.31%|
|VICI Properties Inc Ordinary Shares||0.3%|
VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.
Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.
|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%.
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The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Treynor Ratio of 10.15 with a R-squared of 85.03 and a Beta of 1.21. Its Mean Return is 1.15 while VB’s Sharpe Ratio is 0.74. Furthermore, the fund has a Alpha of -4.02 and a Standard Deviation of 17.82.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Mean Return is 0 while IXUS’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Beta of 0.
VB’s Mean Return is 1.15 points higher than that of IXUS and its R-squared is 85.03 points higher. With a Standard Deviation of 17.82, VB is slightly more volatile than IXUS. The Alpha and Beta of VB are 4.02 points lower and 1.21 points higher than IXUS’s Alpha and Beta.
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VB had its best year in 2013 with an annual return of 37.8%. VB’s worst year over the past decade yielded -9.3% and occurred in 2018. In most years the Vanguard Small-Cap Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2016 where annual returns amounted to 16.24%, 18.22%, and 18.31% respectively.
The year 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VB would have resulted in a final balance of $19,597. This is a profit of $9,597 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.25%.
With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.
VB’s CAGR is 8.17 percentage points higher than that of IXUS and as a result, would have yielded $5,388 more on a $10,000 investment. Thus, VB outperformed IXUS by 8.17% annually.
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