The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between VIG and IXUS? And which fund is better?
The expense ratio of VIG is 0.03 percentage points lower than IXUS’s (0.06% vs. 0.09%). VIG also has a higher exposure to the industrials sector and a higher standard deviation. Overall, VIG has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare VIG vs. IXUS. We’ll look at portfolio growth and fund composition, as well as at their performance and risk metrics. Moreover, I’ll also discuss VIG’s and IXUS’s holdings, industry exposure, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Dividend Appreciation Index Fund ETF Shares||iShares Core MSCI Total International Stock ETF|
|Category||Large Blend||Foreign Large Blend|
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.
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%.
VIG’s dividend yield is 0.57% lower than that of IXUS (1.56% vs. 2.13%). Also, VIG yielded on average 7.26% more per year over the past decade (13.35% vs. 6.09%). The expense ratio of VIG is 0.03 percentage points lower than IXUS’s (0.06% vs. 0.09%).
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The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.
VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.
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%.
VIG is 4.45% more exposed to the Industrials sector than IXUS (17.23% vs 12.78%). VIG’s exposure to Financial Services and Healthcare stocks is 0.16% lower and 6.23% higher respectively (17.18% vs. 17.34% and 15.52% vs. 9.29%). In total, Energy, Utilities, and Communication Services also make up 8.76% less of the fund’s holdings compared to IXUS (5.67% vs. 14.43%).
|JPMorgan Chase & Co||3.8%|
|Johnson & Johnson||3.67%|
|Visa Inc Class A||3.22%|
|UnitedHealth Group Inc||3.22%|
|The Home Depot Inc||2.91%|
|Procter & Gamble Co||2.82%|
|Comcast Corp Class A||2.21%|
VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.
UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.
|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 Dividend Appreciation Index Fund ETF Shares (VIG) has a Mean Return of 1.09 with a R-squared of 92.2 and a Beta of 0.86. Its Sharpe Ratio is 1.01 while VIG’s Alpha is 0.12. Furthermore, the fund has a Treynor Ratio of 14.33 and a Standard Deviation of 12.25.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Mean Return of 0 with a Sharpe Ratio of 0 and a Alpha of 0. Its Treynor Ratio is 0 while IXUS’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.
VIG’s Mean Return is 1.09 points higher than that of IXUS and its R-squared is 92.20 points higher. With a Standard Deviation of 12.25, VIG is slightly more volatile than IXUS. The Alpha and Beta of VIG are 0.12 points higher and 0.86 points higher than IXUS’s Alpha and Beta.
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VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% 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 VIG would have resulted in a final balance of $21,645. This is a profit of $11,645 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.35%.
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%.
VIG’s CAGR is 7.26 percentage points higher than that of IXUS and as a result, would have yielded $7,436 more on a $10,000 investment. Thus, VIG outperformed IXUS by 7.26% annually.
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