The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the Vanguard Total International Stock Index Fund ETF Shares (VXUS) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and VXUS is a Vanguard Foreign Large Blend fund. So, what’s the difference between VIG and VXUS? And which fund is better?
The expense ratio of VIG is 0.02 percentage points lower than VXUS’s (0.06% vs. 0.08%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided higher returns than VXUS over the past ten years.
In this article, we’ll compare VIG vs. VXUS. We’ll look at annual returns and performance, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss VIG’s and VXUS’s fund composition, industry exposure, and risk metrics and examine how these affect their overall returns.
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Summary
| VIG | VXUS | |
| Name | Vanguard Dividend Appreciation Index Fund ETF Shares | Vanguard Total International Stock Index Fund ETF Shares |
| Category | Large Blend | Foreign Large Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 71.92B | 404.73B |
| Avg. Return | 13.35% | 8.41% |
| Div. Yield | 1.56% | 2.44% |
| Expense Ratio | 0.06% | 0.08% |
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 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%.
VIG’s dividend yield is 0.88% lower than that of VXUS (1.56% vs. 2.44%). Also, VIG yielded on average 4.94% more per year over the past decade (13.35% vs. 8.41%). The expense ratio of VIG is 0.02 percentage points lower than VXUS’s (0.06% vs. 0.08%).
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Fund Composition
Industry Exposure
| VIG | VXUS | |
| Technology | 14.93% | 13.07% |
| Industrials | 17.23% | 12.94% |
| Energy | 0.0% | 4.55% |
| Communication Services | 2.86% | 7.06% |
| Utilities | 2.81% | 2.94% |
| Healthcare | 15.52% | 9.19% |
| Consumer Defensive | 15.32% | 7.83% |
| Real Estate | 0.0% | 3.79% |
| Financial Services | 17.18% | 17.64% |
| Consumer Cyclical | 10.47% | 12.64% |
| Basic Materials | 3.67% | 8.37% |
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 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%.
VIG is 4.29% more exposed to the Industrials sector than VXUS (17.23% vs 12.94%). VIG’s exposure to Financial Services and Healthcare stocks is 0.46% lower and 6.33% higher respectively (17.18% vs. 17.64% and 15.52% vs. 9.19%). In total, Energy, Utilities, and Communication Services also make up 8.88% less of the fund’s holdings compared to VXUS (5.67% vs. 14.55%).
Holdings
| VIG Holdings | Weight |
| Microsoft Corp | 4.19% |
| JPMorgan Chase & Co | 3.8% |
| Johnson & Johnson | 3.67% |
| Walmart Inc | 3.38% |
| 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% |
| Coca-Cola Co | 1.98% |
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%.
| 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
| VIG | VXUS | |
| Mean Return | 1.09 | 0.56 |
| R-squared | 92.2 | 98.39 |
| Std. Deviation | 12.25 | 15.12 |
| Alpha | 0.12 | 0.31 |
| Beta | 0.86 | 0.99 |
| Sharpe Ratio | 1.01 | 0.4 |
| Treynor Ratio | 14.33 | 5.14 |
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Alpha of 0.12 with a R-squared of 92.2 and a Treynor Ratio of 14.33. Its Standard Deviation is 12.25 while VIG’s Sharpe Ratio is 1.01. Furthermore, the fund has a Mean Return of 1.09 and a Beta of 0.86.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Mean Return of 0.56 with a Alpha of 0.31 and a Beta of 0.99. Its Treynor Ratio is 5.14 while VXUS’s Standard Deviation is 15.12. Furthermore, the fund has a R-squared of 98.39 and a Sharpe Ratio of 0.4.
VIG’s Mean Return is 0.53 points higher than that of VXUS and its R-squared is 6.19 points lower. With a Standard Deviation of 12.25, VIG is slightly less volatile than VXUS. The Alpha and Beta of VIG are 0.19 points lower and 0.13 points lower than VXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | VIG | VXUS |
| 2020 | 15.46% | 11.32% |
| 2019 | 29.71% | 21.58% |
| 2018 | -2.02% | -14.42% |
| 2017 | 22.22% | 27.52% |
| 2016 | 11.84% | 4.72% |
| 2015 | -1.95% | -4.28% |
| 2014 | 10.06% | -4.17% |
| 2013 | 28.99% | 15.16% |
| 2012 | 11.61% | 18.22% |
| 2011 | 6.21% | 0.0% |
| 2010 | 14.67% | 0.0% |
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 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 |
| VIG | $10,000 | $31,161 | 13.35% |
| VXUS | $10,000 | $19,315 | 8.41% |
A $10,000 investment in VIG would have resulted in a final balance of $31,161. This is a profit of $21,161 over 9 years and amounts to a compound annual growth rate (CAGR) of 13.35%.
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%.
VIG’s CAGR is 4.94 percentage points higher than that of VXUS and as a result, would have yielded $11,846 more on a $10,000 investment. Thus, VIG outperformed VXUS by 4.94% annually.
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