The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between VTI and ACWI? And which fund is better?
The expense ratio of VTI is 0.29 percentage points lower than ACWI’s (0.03% vs. 0.32%). VTI also has a higher exposure to the technology sector and a higher standard deviation. Overall, VTI has provided higher returns than ACWI over the past ten years.
In this article, we’ll compare VTI vs. ACWI. We’ll look at performance and risk metrics, as well as at their annual returns and fund composition. Moreover, I’ll also discuss VTI’s and ACWI’s holdings, portfolio growth, and industry exposure and examine how these affect their overall returns.
Summary
| VTI | ACWI | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | iShares MSCI ACWI ETF |
| Category | Large Blend | N/A |
| Issuer | Vanguard | iShares |
| AUM | 1.26T | 16.85B |
| Avg. Return | 14.70% | 10.21% |
| Div. Yield | 1.26% | 1.39% |
| Expense Ratio | 0.03% | 0.32% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% 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%.
VTI’s dividend yield is 0.13% lower than that of ACWI (1.26% vs. 1.39%). Also, VTI yielded on average 4.48% more per year over the past decade (14.70% vs. 10.21%). The expense ratio of VTI is 0.29 percentage points lower than ACWI’s (0.03% vs. 0.32%).
Fund Composition
Industry Exposure
| VTI | ACWI | |
| Technology | 24.1% | 20.41% |
| Industrials | 9.39% | 9.65% |
| Energy | 2.77% | 3.48% |
| Communication Services | 10.4% | 9.87% |
| Utilities | 2.29% | 2.61% |
| Healthcare | 13.64% | 11.74% |
| Consumer Defensive | 5.77% | 7.15% |
| Real Estate | 3.59% | 2.75% |
| Financial Services | 13.77% | 15.58% |
| Consumer Cyclical | 11.83% | 12.01% |
| Basic Materials | 2.44% | 4.73% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.
VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.
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%.
VTI is 3.69% more exposed to the Technology sector than ACWI (24.1% vs 20.41%). VTI’s exposure to Financial Services and Healthcare stocks is 1.81% lower and 1.90% higher respectively (13.77% vs. 15.58% and 13.64% vs. 11.74%). In total, Basic Materials, Energy, and Real Estate also make up 2.16% less of the fund’s holdings compared to ACWI (8.80% vs. 10.96%).
Holdings
| VTI Holdings | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
| ACWI Holdings | Weight |
| Apple Inc | 3.44% |
| Microsoft Corp | 2.91% |
| Amazon.com Inc | 2.21% |
| Facebook Inc A | 1.25% |
| Alphabet Inc Class C | 1.12% |
| Alphabet Inc A | 1.09% |
| Taiwan Semiconductor Manufacturing Co Ltd | 0.79% |
| Tesla Inc | 0.78% |
| NVIDIA Corp | 0.74% |
| JPMorgan Chase & Co | 0.71% |
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%.
Performance
Annual Returns
| Year | VTI | ACWI |
| 2020 | 20.95% | 16.38% |
| 2019 | 30.8% | 26.7% |
| 2018 | -5.13% | -9.15% |
| 2017 | 21.16% | 24.35% |
| 2016 | 12.68% | 8.22% |
| 2015 | 0.4% | -2.39% |
| 2014 | 12.56% | 4.64% |
| 2013 | 33.51% | 22.91% |
| 2012 | 16.41% | 15.99% |
| 2011 | 1.06% | -7.6% |
| 2010 | 17.26% | 12.31% |
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $42,648 | 14.70% |
| ACWI | $10,000 | $27,241 | 10.21% |
A $10,000 investment in VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
With a $10,000 investment in ACWI, the end total would have been $27,241. This equates to a $17,241 profit over 11 years and a compound annual growth rate (CAGR) of 10.21%.
VTI’s CAGR is 4.48 percentage points higher than that of ACWI and as a result, would have yielded $15,407 more on a $10,000 investment. Thus, VTI outperformed ACWI by 4.48% annually.
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