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VOO vs. ACWI: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between VOO and ACWI? And which fund is better?

The expense ratio of VOO is 0.29 percentage points lower than ACWI’s (0.03% vs. 0.32%). VOO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VOO has provided higher returns than ACWI over the past ten years.

In this article, we’ll compare VOO vs. ACWI. We’ll look at annual returns and performance, as well as at their holdings and risk metrics. Moreover, I’ll also discuss VOO’s and ACWI’s industry exposure, portfolio growth, and fund composition and examine how these affect their overall returns.

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Summary

VOOACWI
NameVanguard S&P 500 ETFiShares MSCI ACWI ETF
CategoryLarge BlendN/A
IssuerVanguardiShares
AUM753.41B16.85B
Avg. Return14.45%10.21%
Div. Yield1.34%1.39%
Expense Ratio0.03%0.32%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

VOO’s dividend yield is 0.05% lower than that of ACWI (1.34% vs. 1.39%). Also, VOO yielded on average 4.23% more per year over the past decade (14.45% vs. 10.21%). The expense ratio of VOO is 0.29 percentage points lower than ACWI’s (0.03% vs. 0.32%).

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Fund Composition

Industry Exposure

VOO vs. ACWI - Industry Exposure

VOOACWI
Technology24.24%20.41%
Industrials8.86%9.65%
Energy2.84%3.48%
Communication Services11.14%9.87%
Utilities2.43%2.61%
Healthcare13.1%11.74%
Consumer Defensive6.32%7.15%
Real Estate2.58%2.75%
Financial Services14.2%15.58%
Consumer Cyclical12.01%12.01%
Basic Materials2.27%4.73%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

VOO is 3.83% more exposed to the Technology sector than ACWI (24.24% vs 20.41%). VOO’s exposure to Financial Services and Healthcare stocks is 1.38% lower and 1.36% higher respectively (14.2% vs. 15.58% and 13.1% vs. 11.74%). In total, Utilities, Real Estate, and Energy also make up 0.99% less of the fund’s holdings compared to ACWI (7.85% vs. 8.84%).

Holdings

VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

ACWI - Holdings

ACWI HoldingsWeight
Apple Inc3.44%
Microsoft Corp2.91%
Amazon.com Inc2.21%
Facebook Inc A1.25%
Alphabet Inc Class C1.12%
Alphabet Inc A1.09%
Taiwan Semiconductor Manufacturing Co Ltd0.79%
Tesla Inc0.78%
NVIDIA Corp0.74%
JPMorgan Chase & Co0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

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Performance

Annual Returns

VOO vs. ACWI - Annual Returns

YearVOOACWI
202018.35%16.38%
201931.46%26.7%
2018-4.42%-9.15%
201721.78%24.35%
201611.93%8.22%
20151.35%-2.39%
201413.63%4.64%
201332.33%22.91%
201215.98%15.99%
20112.09%-7.6%
20100.0%12.31%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

VOO vs. ACWI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$36,57514.45%
ACWI$10,000$24,25510.21%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in ACWI, the end total would have been $24,255. This equates to a $14,255 profit over 10 years and a compound annual growth rate (CAGR) of 10.21%.

VOO’s CAGR is 4.23 percentage points higher than that of ACWI and as a result, would have yielded $12,320 more on a $10,000 investment. Thus, VOO outperformed ACWI by 4.23% annually.


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