The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Vanguard Total International Stock Index Fund ETF Shares (VXUS) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and VXUS is a Vanguard Foreign Large Blend fund. So, what’s the difference between VGT and VXUS? And which fund is better?
The expense ratio of VGT is 0.02 percentage points higher than VXUS’s (0.1% vs. 0.08%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than VXUS over the past ten years.
In this article, we’ll compare VGT vs. VXUS. We’ll look at risk metrics and holdings, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss VGT’s and VXUS’s fund composition, annual returns, and performance and examine how these affect their overall returns.
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Summary
| VGT | VXUS | |
| Name | Vanguard Information Technology Index Fund ETF Shares | Vanguard Total International Stock Index Fund ETF Shares |
| Category | Technology | Foreign Large Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 54.13B | 404.73B |
| Avg. Return | 20.84% | 8.41% |
| Div. Yield | 0.66% | 2.44% |
| Expense Ratio | 0.1% | 0.08% |
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 Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.
VGT’s dividend yield is 1.78% lower than that of VXUS (0.66% vs. 2.44%). Also, VGT yielded on average 12.43% more per year over the past decade (20.84% vs. 8.41%). The expense ratio of VGT is 0.02 percentage points higher than VXUS’s (0.1% vs. 0.08%).
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Fund Composition
Industry Exposure
| VGT | VXUS | |
| Technology | 88.89% | 13.07% |
| Industrials | 1.67% | 12.94% |
| Energy | 0.0% | 4.55% |
| Communication Services | 0.61% | 7.06% |
| Utilities | 0.0% | 2.94% |
| Healthcare | 0.0% | 9.19% |
| Consumer Defensive | 0.0% | 7.83% |
| Real Estate | 0.0% | 3.79% |
| Financial Services | 8.83% | 17.64% |
| Consumer Cyclical | 0.0% | 12.64% |
| Basic Materials | 0.0% | 8.37% |
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 Vanguard Total International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.
VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.
VGT is 75.82% more exposed to the Technology sector than VXUS (88.89% vs 13.07%). VGT’s exposure to Financial Services and Industrials stocks is 8.81% lower and 11.27% lower respectively (8.83% vs. 17.64% and 1.67% vs. 12.94%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 24.26% less of the fund’s holdings compared to VXUS (0.00% vs. 24.26%).
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%.
| VXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.62% |
| Tencent Holdings Ltd | 1.41% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.26% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.05% |
| ASML Holding NV | 0.86% |
| Roche Holding AG | 0.81% |
| Toyota Motor Corp | 0.67% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.61% |
| Novartis AG | 0.6% |
VXUS’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 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
Risk Analysis
| VGT | VXUS | |
| Mean Return | 1.76 | 0.56 |
| R-squared | 74.84 | 98.39 |
| Std. Deviation | 16.61 | 15.12 |
| Alpha | 10.41 | 0.31 |
| Beta | 1.02 | 0.99 |
| Sharpe Ratio | 1.23 | 0.4 |
| Treynor Ratio | 20.55 | 5.14 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Treynor Ratio of 20.55 with a Alpha of 10.41 and a Mean Return of 1.76. Its Beta is 1.02 while VGT’s R-squared is 74.84. Furthermore, the fund has a Sharpe Ratio of 1.23 and a Standard Deviation of 16.61.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a R-squared of 98.39 with a Sharpe Ratio of 0.4 and a Mean Return of 0.56. Its Treynor Ratio is 5.14 while VXUS’s Beta is 0.99. Furthermore, the fund has a Alpha of 0.31 and a Standard Deviation of 15.12.
VGT’s Mean Return is 1.20 points higher than that of VXUS and its R-squared is 23.55 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than VXUS. The Alpha and Beta of VGT are 10.10 points higher and 0.03 points higher than VXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | VGT | VXUS |
| 2020 | 45.94% | 11.32% |
| 2019 | 48.68% | 21.58% |
| 2018 | 2.52% | -14.42% |
| 2017 | 37.07% | 27.52% |
| 2016 | 13.73% | 4.72% |
| 2015 | 5.02% | -4.28% |
| 2014 | 18.01% | -4.17% |
| 2013 | 30.91% | 15.16% |
| 2012 | 14.05% | 18.22% |
| 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 VXUS, returning 27.52% on an annual basis. The poorest year for VXUS in the last ten years was 2018, with a yield of -14.42%. Most years the Vanguard Total International Stock Index Fund ETF Shares has given investors modest returns, such as in 2010, 2016, and 2020, when gains were 0.0%, 4.72%, and 11.32% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VGT | $10,000 | $64,167 | 20.84% |
| VXUS | $10,000 | $19,315 | 8.41% |
A $10,000 investment in VGT would have resulted in a final balance of $64,167. This is a profit of $54,167 over 9 years and amounts to a compound annual growth rate (CAGR) of 20.84%.
With a $10,000 investment in VXUS, the end total would have been $19,315. This equates to a $9,315 profit over 9 years and a compound annual growth rate (CAGR) of 8.41%.
VGT’s CAGR is 12.43 percentage points higher than that of VXUS and as a result, would have yielded $44,852 more on a $10,000 investment. Thus, VGT outperformed VXUS by 12.43% annually.
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