The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. VEU is a Vanguard Foreign Large Blend fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between VEU and IXUS? And which fund is better?
The expense ratio of VEU is 0.01 percentage points lower than IXUS’s (0.08% vs. 0.09%). VEU also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VEU has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare VEU vs. IXUS. We’ll look at fund composition and portfolio growth, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss VEU’s and IXUS’s holdings, performance, and industry exposure and examine how these affect their overall returns.
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Summary
| VEU | IXUS | |
| Name | Vanguard FTSE All-World ex-US Index Fund ETF Shares | iShares Core MSCI Total International Stock ETF |
| Category | Foreign Large Blend | Foreign Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 53.64B | 29.54B |
| Avg. Return | 6.64% | 6.09% |
| Div. Yield | 2.31% | 2.13% |
| Expense Ratio | 0.08% | 0.09% |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 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%.
VEU’s dividend yield is 0.18% higher than that of IXUS (2.31% vs. 2.13%). Also, VEU yielded on average 0.55% more per year over the past decade (6.64% vs. 6.09%). The expense ratio of VEU is 0.01 percentage points lower than IXUS’s (0.08% vs. 0.09%).
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Fund Composition
Industry Exposure
| VEU | IXUS | |
| Technology | 12.94% | 13.24% |
| Industrials | 12.19% | 12.78% |
| Energy | 4.69% | 4.39% |
| Communication Services | 7.44% | 7.09% |
| Utilities | 2.89% | 2.95% |
| Healthcare | 9.34% | 9.29% |
| Consumer Defensive | 8.28% | 8.19% |
| Real Estate | 3.04% | 3.66% |
| Financial Services | 18.46% | 17.34% |
| Consumer Cyclical | 12.57% | 12.57% |
| Basic Materials | 8.17% | 8.5% |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has the most exposure to the Financial Services sector at 18.46%. This is followed by Technology and Consumer Cyclical at 12.94% and 12.57% respectively. Real Estate (3.04%), Energy (4.69%), and Communication Services (7.44%) only make up 15.17% of the fund’s total assets.
VEU’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Industrials, and Consumer Cyclical stocks at 8.17%, 8.28%, 9.34%, 12.19%, and 12.57%.
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%.
VEU is 1.12% more exposed to the Financial Services sector than IXUS (18.46% vs 17.34%). VEU’s exposure to Technology and Consumer Cyclical stocks is 0.30% lower and 0.00% lower respectively (12.94% vs. 13.24% and 12.57% vs. 12.57%). In total, Real Estate, Energy, and Communication Services also make up 0.03% more of the fund’s holdings compared to IXUS (15.17% vs. 15.14%).
Holdings
| VEU Holdings | Weight |
| Tencent Holdings Ltd | 1.57% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.4% |
| Nestle SA | 1.22% |
| Taiwan Semiconductor Manufacturing Co Ltd | 0.98% |
| ASML Holding NV | 0.95% |
| Taiwan Semiconductor Manufacturing Co Ltd ADR | 0.91% |
| Roche Holding AG | 0.91% |
| Toyota Motor Corp | 0.75% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.68% |
| Novartis AG | 0.67% |
VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.
Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.
| 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
| VEU | IXUS | |
| Mean Return | 0.56 | 0 |
| R-squared | 98.44 | 0 |
| Std. Deviation | 15.08 | 0 |
| Alpha | 0.28 | 0 |
| Beta | 0.99 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.12 | 0 |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a R-squared of 98.44 with a Mean Return of 0.56 and a Standard Deviation of 15.08. Its Beta is 0.99 while VEU’s Alpha is 0.28. Furthermore, the fund has a Treynor Ratio of 5.12 and a Sharpe Ratio of 0.4.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Sharpe Ratio is 0 while IXUS’s R-squared is 0. Furthermore, the fund has a Beta of 0 and a Standard Deviation of 0.
VEU’s Mean Return is 0.56 points higher than that of IXUS and its R-squared is 98.44 points higher. With a Standard Deviation of 15.08, VEU is slightly more volatile than IXUS. The Alpha and Beta of VEU are 0.28 points higher and 0.99 points higher than IXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | VEU | IXUS |
| 2020 | 11.39% | 11.14% |
| 2019 | 21.63% | 21.85% |
| 2018 | -13.97% | -14.55% |
| 2017 | 27.27% | 28.08% |
| 2016 | 4.77% | 4.66% |
| 2015 | -4.67% | -4.62% |
| 2014 | -4.05% | -3.96% |
| 2013 | 14.5% | 15.85% |
| 2012 | 18.55% | 0.0% |
| 2011 | -14.25% | 0.0% |
| 2010 | 11.85% | 0.0% |
VEU had its best year in 2017 with an annual return of 27.27%. VEU’s worst year over the past decade yielded -14.25% and occurred in 2011. In most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares provided moderate returns such as in 2016, 2020, and 2010 where annual returns amounted to 4.77%, 11.39%, and 11.85% 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 |
| VEU | $10,000 | $14,215 | 6.64% |
| IXUS | $10,000 | $14,209 | 6.09% |
A $10,000 investment in VEU would have resulted in a final balance of $14,215. This is a profit of $4,215 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.64%.
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%.
VEU’s CAGR is 0.55 percentage points higher than that of IXUS and as a result, would have yielded $6 more on a $10,000 investment. Thus, VEU outperformed IXUS by 0.55% annually.
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