The Vanguard Growth Index Fund ETF Shares (VUG) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between VUG and IXUS? And which fund is better?
The expense ratio of VUG is 0.05 percentage points lower than IXUS’s (0.04% vs. 0.09%). VUG also has a higher exposure to the technology sector and a higher standard deviation. Overall, VUG has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare VUG vs. IXUS. We’ll look at holdings and risk metrics, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss VUG’s and IXUS’s performance, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||Vanguard Growth Index Fund ETF Shares||iShares Core MSCI Total International Stock ETF|
|Category||Large Growth||Foreign Large Blend|
The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.
The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.
VUG’s dividend yield is 1.56% lower than that of IXUS (0.57% vs. 2.13%). Also, VUG yielded on average 11.49% more per year over the past decade (17.58% vs. 6.09%). The expense ratio of VUG is 0.05 percentage points lower than IXUS’s (0.04% vs. 0.09%).
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The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.
VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.
The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.
IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.
VUG is 25.81% more exposed to the Technology sector than IXUS (39.05% vs 13.24%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 5.21% higher and 9.40% higher respectively (17.78% vs. 12.57% and 16.49% vs. 7.09%). In total, Energy, Basic Materials, and Consumer Defensive also make up 16.83% less of the fund’s holdings compared to IXUS (4.25% vs. 21.08%).
|Facebook Inc Class A||3.89%|
|Alphabet Inc Class A||3.43%|
|Alphabet Inc Class C||3.22%|
|Visa Inc Class A||1.78%|
|PayPal Holdings Inc||1.6%|
VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.
Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.
|Taiwan Semiconductor Manufacturing Co Ltd||1.64%|
|Tencent Holdings Ltd||1.35%|
|Alibaba Group Holding Ltd Ordinary Shares||1.34%|
|Samsung Electronics Co Ltd||1.06%|
|ASML Holding NV||0.9%|
|Roche Holding AG||0.81%|
|LVMH Moet Hennessy Louis Vuitton SE||0.67%|
|Toyota Motor Corp||0.59%|
IXUS’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 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.
ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.
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The Vanguard Growth Index Fund ETF Shares (VUG) has a R-squared of 92.48 with a Standard Deviation of 14.76 and a Sharpe Ratio of 1.13. Its Mean Return is 1.44 while VUG’s Alpha is 1.81. Furthermore, the fund has a Beta of 1.04 and a Treynor Ratio of 16.13.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its R-squared is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Standard Deviation of 0.
VUG’s Mean Return is 1.44 points higher than that of IXUS and its R-squared is 92.48 points higher. With a Standard Deviation of 14.76, VUG is slightly more volatile than IXUS. The Alpha and Beta of VUG are 1.81 points higher and 1.04 points higher than IXUS’s Alpha and Beta.
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VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% respectively.
The year 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VUG would have resulted in a final balance of $29,615. This is a profit of $19,615 over 7 years and amounts to a compound annual growth rate (CAGR) of 17.58%.
With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.
VUG’s CAGR is 11.49 percentage points higher than that of IXUS and as a result, would have yielded $15,406 more on a $10,000 investment. Thus, VUG outperformed IXUS by 11.49% annually.
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