The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. VCIT is a Vanguard Corporate Bond fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between VCIT and IXUS? And which fund is better?
The expense ratio of VCIT is 0.04 percentage points lower than IXUS’s (0.05% vs. 0.09%). VCIT is mostly comprised of BBB bonds while IXUS has a high exposure to the financial services sector. Overall, VCIT has provided lower returns than IXUS over the past ten years.
In this article, we’ll compare VCIT vs. IXUS. We’ll look at holdings and annual returns, as well as at their performance and risk metrics. Moreover, I’ll also discuss VCIT’s and IXUS’s fund composition, industry exposure, and portfolio growth and examine how these affect their overall returns.
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Summary
| VCIT | IXUS | |
| Name | Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares | iShares Core MSCI Total International Stock ETF |
| Category | Corporate Bond | Foreign Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 48.39B | 29.54B |
| Avg. Return | 5.84% | 6.09% |
| Div. Yield | 2.33% | 2.13% |
| Expense Ratio | 0.05% | 0.09% |
The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) is a Corporate Bond fund that is issued by Vanguard. It currently has 48.39B total assets under management and has yielded an average annual return of 5.84% over the past 10 years. The fund has a dividend yield of 2.33% 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%.
VCIT’s dividend yield is 0.20% higher than that of IXUS (2.33% vs. 2.13%). Also, VCIT yielded on average 0.24% less per year over the past decade (5.84% vs. 6.09%). The expense ratio of VCIT is 0.04 percentage points lower than IXUS’s (0.05% vs. 0.09%).
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Fund Composition
Holdings
| VCIT Bond Sectors | Weight |
| BBB | 55.28% |
| A | 37.85% |
| AA | 5.22% |
| AAA | 1.57% |
| Below B | 0.08% |
| Others | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
VCIT’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 55.28%, 37.85%, 5.22%, 1.57%, and 0.08%. The fund is less weighted towards Others (0.0%), B (0.0%), and BB (0.0%) rated bonds.
| 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%.
Risk Analysis
| VCIT | IXUS | |
| Mean Return | 0.44 | 0 |
| R-squared | 63.18 | 0 |
| Std. Deviation | 5.08 | 0 |
| Alpha | 0.89 | 0 |
| Beta | 1.35 | 0 |
| Sharpe Ratio | 0.91 | 0 |
| Treynor Ratio | 3.43 | 0 |
The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) has a Standard Deviation of 5.08 with a Beta of 1.35 and a Alpha of 0.89. Its Treynor Ratio is 3.43 while VCIT’s R-squared is 63.18. Furthermore, the fund has a Sharpe Ratio of 0.91 and a Mean Return of 0.44.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Beta of 0 with a Alpha of 0 and a Standard Deviation of 0. Its Treynor Ratio is 0 while IXUS’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Sharpe Ratio of 0.
VCIT’s Mean Return is 0.44 points higher than that of IXUS and its R-squared is 63.18 points higher. With a Standard Deviation of 5.08, VCIT is slightly more volatile than IXUS. The Alpha and Beta of VCIT are 0.89 points higher and 1.35 points higher than IXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | VCIT | IXUS |
| 2020 | 9.55% | 11.14% |
| 2019 | 13.97% | 21.85% |
| 2018 | -1.75% | -14.55% |
| 2017 | 5.5% | 28.08% |
| 2016 | 5.3% | 4.66% |
| 2015 | 0.88% | -4.62% |
| 2014 | 7.47% | -3.96% |
| 2013 | -1.8% | 15.85% |
| 2012 | 11.36% | 0.0% |
| 2011 | 7.94% | 0.0% |
| 2010 | 10.65% | 0.0% |
VCIT had its best year in 2019 with an annual return of 13.97%. VCIT’s worst year over the past decade yielded -1.8% and occurred in 2013. In most years the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares provided moderate returns such as in 2017, 2014, and 2011 where annual returns amounted to 5.5%, 7.47%, and 7.94% 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.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VCIT | $10,000 | $14,774 | 5.84% |
| IXUS | $10,000 | $14,209 | 6.09% |
A $10,000 investment in VCIT would have resulted in a final balance of $14,774. This is a profit of $4,774 over 7 years and amounts to a compound annual growth rate (CAGR) of 5.84%.
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%.
VCIT’s CAGR is 0.24 percentage points lower than that of IXUS and as a result, would have yielded $565 more on a $10,000 investment. Thus, VCIT performed worse than IXUS by 0.24% annually.
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