The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the Vanguard Total International Stock Index Fund ETF Shares (VXUS) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and VXUS is a Vanguard Foreign Large Blend fund. So, what’s the difference between VO and VXUS? And which fund is better?
The expense ratio of VO is 0.04 percentage points lower than VXUS’s (0.04% vs. 0.08%). VO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VO has provided higher returns than VXUS over the past ten years.
In this article, we’ll compare VO vs. VXUS. We’ll look at portfolio growth and fund composition, as well as at their annual returns and holdings. Moreover, I’ll also discuss VO’s and VXUS’s industry exposure, risk metrics, and performance and examine how these affect their overall returns.
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Summary
| VO | VXUS | |
| Name | Vanguard Mid-Cap Index Fund ETF Shares | Vanguard Total International Stock Index Fund ETF Shares |
| Category | Mid-Cap Blend | Foreign Large Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 154.08B | 404.73B |
| Avg. Return | 14.34% | 8.41% |
| Div. Yield | 1.23% | 2.44% |
| Expense Ratio | 0.04% | 0.08% |
The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
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%.
VO’s dividend yield is 1.21% lower than that of VXUS (1.23% vs. 2.44%). Also, VO yielded on average 5.93% more per year over the past decade (14.34% vs. 8.41%). The expense ratio of VO is 0.04 percentage points lower than VXUS’s (0.04% vs. 0.08%).
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Fund Composition
Industry Exposure
| VO | VXUS | |
| Technology | 22.01% | 13.07% |
| Industrials | 11.92% | 12.94% |
| Energy | 3.82% | 4.55% |
| Communication Services | 5.61% | 7.06% |
| Utilities | 5.12% | 2.94% |
| Healthcare | 13.03% | 9.19% |
| Consumer Defensive | 3.25% | 7.83% |
| Real Estate | 8.67% | 3.79% |
| Financial Services | 11.08% | 17.64% |
| Consumer Cyclical | 12.12% | 12.64% |
| Basic Materials | 3.36% | 8.37% |
The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
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%.
VO is 8.94% more exposed to the Technology sector than VXUS (22.01% vs 13.07%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 3.84% higher and 0.52% lower respectively (13.03% vs. 9.19% and 12.12% vs. 12.64%). In total, Basic Materials, Energy, and Utilities also make up 3.56% less of the fund’s holdings compared to VXUS (12.30% vs. 15.86%).
Holdings
| VO Holdings | Weight |
| IDEXX Laboratories Inc | 0.78% |
| DocuSign Inc | 0.75% |
| Marvell Technology Inc | 0.68% |
| IQVIA Holdings Inc | 0.68% |
| Chipotle Mexican Grill Inc | 0.63% |
| Veeva Systems Inc Class A | 0.62% |
| Digital Realty Trust Inc | 0.62% |
| Centene Corp | 0.62% |
| Aptiv PLC | 0.62% |
| Carrier Global Corp Ordinary Shares | 0.61% |
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
| 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
| VO | VXUS | |
| Mean Return | 1.14 | 0.56 |
| R-squared | 92.22 | 98.39 |
| Std. Deviation | 15.65 | 15.12 |
| Alpha | -2.71 | 0.31 |
| Beta | 1.11 | 0.99 |
| Sharpe Ratio | 0.83 | 0.4 |
| Treynor Ratio | 11.32 | 5.14 |
The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Alpha of -2.71 with a Treynor Ratio of 11.32 and a Sharpe Ratio of 0.83. Its Beta is 1.11 while VO’s Mean Return is 1.14. Furthermore, the fund has a Standard Deviation of 15.65 and a R-squared of 92.22.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Treynor Ratio of 5.14 with a Alpha of 0.31 and a Beta of 0.99. Its Mean Return is 0.56 while VXUS’s Sharpe Ratio is 0.4. Furthermore, the fund has a Standard Deviation of 15.12 and a R-squared of 98.39.
VO’s Mean Return is 0.58 points higher than that of VXUS and its R-squared is 6.17 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than VXUS. The Alpha and Beta of VO are 3.02 points lower and 0.12 points higher than VXUS’s Alpha and Beta.
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Performance
Annual Returns
| Year | VO | VXUS |
| 2020 | 18.22% | 11.32% |
| 2019 | 31.04% | 21.58% |
| 2018 | -9.21% | -14.42% |
| 2017 | 19.25% | 27.52% |
| 2016 | 11.23% | 4.72% |
| 2015 | -1.34% | -4.28% |
| 2014 | 13.76% | -4.17% |
| 2013 | 35.15% | 15.16% |
| 2012 | 15.98% | 18.22% |
| 2011 | -1.96% | 0.0% |
| 2010 | 25.57% | 0.0% |
VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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 |
| VO | $10,000 | $32,820 | 14.34% |
| VXUS | $10,000 | $19,315 | 8.41% |
A $10,000 investment in VO would have resulted in a final balance of $32,820. This is a profit of $22,820 over 9 years and amounts to a compound annual growth rate (CAGR) of 14.34%.
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%.
VO’s CAGR is 5.93 percentage points higher than that of VXUS and as a result, would have yielded $13,505 more on a $10,000 investment. Thus, VO outperformed VXUS by 5.93% annually.
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