The Vanguard Information Technology Index Fund ETF Shares (VGT) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between VGT and IXUS? And which fund is better?
The expense ratio of VGT is 0.01 percentage points higher than IXUS’s (0.1% vs. 0.09%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare VGT vs. IXUS. We’ll look at annual returns and risk metrics, as well as at their holdings and fund composition. Moreover, I’ll also discuss VGT’s and IXUS’s portfolio growth, industry exposure, and performance and examine how these affect their overall returns.
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Summary
| VGT | IXUS | |
| Name | Vanguard Information Technology Index Fund ETF Shares | iShares Core MSCI Total International Stock ETF |
| Category | Technology | Foreign Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 54.13B | 29.54B |
| Avg. Return | 20.84% | 6.09% |
| Div. Yield | 0.66% | 2.13% |
| Expense Ratio | 0.1% | 0.09% |
The Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.
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%.
VGT’s dividend yield is 1.47% lower than that of IXUS (0.66% vs. 2.13%). Also, VGT yielded on average 14.75% more per year over the past decade (20.84% vs. 6.09%). The expense ratio of VGT is 0.01 percentage points higher than IXUS’s (0.1% vs. 0.09%).
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Fund Composition
Industry Exposure
| VGT | IXUS | |
| Technology | 88.89% | 13.24% |
| Industrials | 1.67% | 12.78% |
| Energy | 0.0% | 4.39% |
| Communication Services | 0.61% | 7.09% |
| Utilities | 0.0% | 2.95% |
| Healthcare | 0.0% | 9.29% |
| Consumer Defensive | 0.0% | 8.19% |
| Real Estate | 0.0% | 3.66% |
| Financial Services | 8.83% | 17.34% |
| Consumer Cyclical | 0.0% | 12.57% |
| Basic Materials | 0.0% | 8.5% |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.
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%.
VGT is 75.65% more exposed to the Technology sector than IXUS (88.89% vs 13.24%). VGT’s exposure to Financial Services and Industrials stocks is 8.51% lower and 11.11% lower respectively (8.83% vs. 17.34% and 1.67% vs. 12.78%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 24.42% less of the fund’s holdings compared to IXUS (0.00% vs. 24.42%).
Holdings
| VGT Holdings | Weight |
| Apple Inc | 19.58% |
| Microsoft Corp | 16.53% |
| NVIDIA Corp | 4.22% |
| Visa Inc Class A | 3.16% |
| PayPal Holdings Inc | 2.76% |
| Mastercard Inc Class A | 2.76% |
| Adobe Inc | 2.39% |
| Intel Corp | 1.94% |
| Salesforce.com Inc | 1.91% |
| Cisco Systems Inc | 1.9% |
VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.
Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.
| 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
| VGT | IXUS | |
| Mean Return | 1.76 | 0 |
| R-squared | 74.84 | 0 |
| Std. Deviation | 16.61 | 0 |
| Alpha | 10.41 | 0 |
| Beta | 1.02 | 0 |
| Sharpe Ratio | 1.23 | 0 |
| Treynor Ratio | 20.55 | 0 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Sharpe Ratio of 1.23 with a Treynor Ratio of 20.55 and a Mean Return of 1.76. Its Standard Deviation is 16.61 while VGT’s Alpha is 10.41. Furthermore, the fund has a Beta of 1.02 and a R-squared of 74.84.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Treynor Ratio of 0 with a R-squared of 0 and a Alpha of 0. Its Sharpe Ratio is 0 while IXUS’s Standard Deviation is 0. Furthermore, the fund has a Beta of 0 and a Mean Return of 0.
VGT’s Mean Return is 1.76 points higher than that of IXUS and its R-squared is 74.84 points higher. With a Standard Deviation of 16.61, VGT is slightly more volatile than IXUS. The Alpha and Beta of VGT are 10.41 points higher and 1.02 points higher than IXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | VGT | IXUS |
| 2020 | 45.94% | 11.14% |
| 2019 | 48.68% | 21.85% |
| 2018 | 2.52% | -14.55% |
| 2017 | 37.07% | 28.08% |
| 2016 | 13.73% | 4.66% |
| 2015 | 5.02% | -4.62% |
| 2014 | 18.01% | -3.96% |
| 2013 | 30.91% | 15.85% |
| 2012 | 14.05% | 0.0% |
| 2011 | 0.52% | 0.0% |
| 2010 | 12.74% | 0.0% |
VGT had its best year in 2019 with an annual return of 48.68%. VGT’s worst year over the past decade yielded 0.52% and occurred in 2011. In most years the Vanguard Information Technology Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 13.73%, 14.05%, and 18.01% 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 |
| VGT | $10,000 | $42,977 | 20.84% |
| IXUS | $10,000 | $14,209 | 6.09% |
A $10,000 investment in VGT would have resulted in a final balance of $42,977. This is a profit of $32,977 over 7 years and amounts to a compound annual growth rate (CAGR) of 20.84%.
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%.
VGT’s CAGR is 14.75 percentage points higher than that of IXUS and as a result, would have yielded $28,768 more on a $10,000 investment. Thus, VGT outperformed IXUS by 14.75% annually.
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