VUG vs. VXUS: What’s The Difference?

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

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

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

Summary

VUG VXUS
Name Vanguard Growth Index Fund ETF Shares Vanguard Total International Stock Index Fund ETF Shares
Category Large Growth Foreign Large Blend
Issuer Vanguard Vanguard
AUM 165.53B 404.73B
Avg. Return 17.58% 8.41%
Div. Yield 0.57% 2.44%
Expense Ratio 0.04% 0.08%

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 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%.

VUG’s dividend yield is 1.87% lower than that of VXUS (0.57% vs. 2.44%). Also, VUG yielded on average 9.17% more per year over the past decade (17.58% vs. 8.41%). The expense ratio of VUG is 0.04 percentage points lower than VXUS’s (0.04% vs. 0.08%).

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Fund Composition

Industry Exposure

VUG vs. VXUS - Industry Exposure

VUG VXUS
Technology 39.05% 13.07%
Industrials 5.13% 12.94%
Energy 0.32% 4.55%
Communication Services 16.49% 7.06%
Utilities 0.0% 2.94%
Healthcare 8.09% 9.19%
Consumer Defensive 2.41% 7.83%
Real Estate 2.46% 3.79%
Financial Services 6.75% 17.64%
Consumer Cyclical 17.78% 12.64%
Basic Materials 1.52% 8.37%

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 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%.

VUG is 25.98% more exposed to the Technology sector than VXUS (39.05% vs 13.07%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 5.14% higher and 9.43% higher respectively (17.78% vs. 12.64% and 16.49% vs. 7.06%). In total, Energy, Basic Materials, and Consumer Defensive also make up 16.50% less of the fund’s holdings compared to VXUS (4.25% vs. 20.75%).

Holdings

VUG - Holdings

VUG Holdings Weight
Apple Inc 10.13%
Microsoft Corp 9.52%
Amazon.com Inc 6.88%
Facebook Inc Class A 3.89%
Alphabet Inc Class A 3.43%
Alphabet Inc Class C 3.22%
Tesla Inc 2.44%
NVIDIA Corp 2.21%
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%.

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

VUG VXUS
Mean Return 1.44 0.56
R-squared 92.48 98.39
Std. Deviation 14.76 15.12
Alpha 1.81 0.31
Beta 1.04 0.99
Sharpe Ratio 1.13 0.4
Treynor Ratio 16.13 5.14

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 Beta is 1.04 while VUG’s Treynor Ratio is 16.13. Furthermore, the fund has a Mean Return of 1.44 and a Alpha of 1.81.

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a Mean Return of 0.56 and a Standard Deviation of 15.12. Its Treynor Ratio is 5.14 while VXUS’s Alpha is 0.31. Furthermore, the fund has a Beta of 0.99 and a R-squared of 98.39.

VUG’s Mean Return is 0.88 points higher than that of VXUS and its R-squared is 5.91 points lower. With a Standard Deviation of 14.76, VUG is slightly less volatile than VXUS. The Alpha and Beta of VUG are 1.50 points higher and 0.05 points higher than VXUS’s Alpha and Beta.

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Performance

Annual Returns

VUG vs. VXUS - Annual Returns

Year VUG VXUS
2020 40.16% 11.32%
2019 37.26% 21.58%
2018 -3.32% -14.42%
2017 27.8% 27.52%
2016 6.13% 4.72%
2015 3.32% -4.28%
2014 13.62% -4.17%
2013 32.38% 15.16%
2012 17.03% 18.22%
2011 1.87% 0.0%
2010 17.11% 0.0%

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 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

VUG vs. VXUS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VUG $10,000 $45,880 17.58%
VXUS $10,000 $19,315 8.41%

A $10,000 investment in VUG would have resulted in a final balance of $45,880. This is a profit of $35,880 over 9 years and amounts to a compound annual growth rate (CAGR) of 17.58%.

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%.

VUG’s CAGR is 9.17 percentage points higher than that of VXUS and as a result, would have yielded $26,565 more on a $10,000 investment. Thus, VUG outperformed VXUS by 9.17% annually.


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