VTV vs. VXUS: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Total International Stock Index Fund ETF Shares (VXUS) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VXUS is a Vanguard Foreign Large Blend fund. So, what’s the difference between VTV and VXUS? And which fund is better?

The expense ratio of VTV is 0.04 percentage points lower than VXUS’s (0.04% vs. 0.08%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided higher returns than VXUS over the past ten years.

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

Summary

VTV VXUS
Name Vanguard Value Index Fund ETF Shares Vanguard Total International Stock Index Fund ETF Shares
Category Large Value Foreign Large Blend
Issuer Vanguard Vanguard
AUM 125.77B 404.73B
Avg. Return 12.07% 8.41%
Div. Yield 2.15% 2.44%
Expense Ratio 0.04% 0.08%

The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% 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%.

VTV’s dividend yield is 0.29% lower than that of VXUS (2.15% vs. 2.44%). Also, VTV yielded on average 3.67% more per year over the past decade (12.07% vs. 8.41%). The expense ratio of VTV is 0.04 percentage points lower than VXUS’s (0.04% vs. 0.08%).

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Fund Composition

Industry Exposure

VTV vs. VXUS - Industry Exposure

VTV VXUS
Technology 7.86% 13.07%
Industrials 12.61% 12.94%
Energy 5.59% 4.55%
Communication Services 5.49% 7.06%
Utilities 5.37% 2.94%
Healthcare 19.84% 9.19%
Consumer Defensive 10.72% 7.83%
Real Estate 3.01% 3.79%
Financial Services 22.81% 17.64%
Consumer Cyclical 3.79% 12.64%
Basic Materials 2.91% 8.37%

The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.

VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.

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%.

VTV is 5.17% more exposed to the Financial Services sector than VXUS (22.81% vs 17.64%). VTV’s exposure to Healthcare and Industrials stocks is 10.65% higher and 0.33% lower respectively (19.84% vs. 9.19% and 12.61% vs. 12.94%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 7.20% less of the fund’s holdings compared to VXUS (12.17% vs. 19.37%).

Holdings

VTV - Holdings

VTV Holdings Weight
Berkshire Hathaway Inc Class B 2.98%
JPMorgan Chase & Co 2.82%
Johnson & Johnson 2.6%
UnitedHealth Group Inc 2.27%
Procter & Gamble Co 1.98%
Bank of America Corp 1.91%
Exxon Mobil Corp 1.6%
Comcast Corp Class A 1.57%
Intel Corp 1.36%
Verizon Communications Inc 1.32%

VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.

Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.

VXUS - Holdings

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%.

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Risk Analysis

VTV VXUS
Mean Return 1.05 0.56
R-squared 92.61 98.39
Std. Deviation 13.78 15.12
Alpha -1.92 0.31
Beta 0.98 0.99
Sharpe Ratio 0.87 0.4
Treynor Ratio 11.94 5.14

The Vanguard Value Index Fund ETF Shares (VTV) has a Standard Deviation of 13.78 with a R-squared of 92.61 and a Alpha of -1.92. Its Beta is 0.98 while VTV’s Sharpe Ratio is 0.87. Furthermore, the fund has a Treynor Ratio of 11.94 and a Mean Return of 1.05.

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a R-squared of 98.39 with a Treynor Ratio of 5.14 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 Alpha of 0.31 and a Standard Deviation of 15.12.

VTV’s Mean Return is 0.49 points higher than that of VXUS and its R-squared is 5.78 points lower. With a Standard Deviation of 13.78, VTV is slightly less volatile than VXUS. The Alpha and Beta of VTV are 2.23 points lower and 0.01 points lower than VXUS’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. VXUS - Annual Returns

Year VTV VXUS
2020 2.23% 11.32%
2019 25.85% 21.58%
2018 -5.39% -14.42%
2017 17.12% 27.52%
2016 16.88% 4.72%
2015 -0.89% -4.28%
2014 13.19% -4.17%
2013 33.03% 15.16%
2012 15.19% 18.22%
2011 1.16% 0.0%
2010 14.45% 0.0%

VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% 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

VTV vs. VXUS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $28,643 12.07%
VXUS $10,000 $19,315 8.41%

A $10,000 investment in VTV would have resulted in a final balance of $28,643. This is a profit of $18,643 over 9 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

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%.

VTV’s CAGR is 3.67 percentage points higher than that of VXUS and as a result, would have yielded $9,328 more on a $10,000 investment. Thus, VTV outperformed VXUS by 3.67% annually.


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