VXF vs. ACWI: What’s The Difference?

The Vanguard Extended Market Index Fund ETF Shares (VXF) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and ACWI is a iShares N/A fund. So, what’s the difference between VXF and ACWI? And which fund is better?

The expense ratio of VXF is 0.26 percentage points lower than ACWI’s (0.06% vs. 0.32%). VXF also has a higher exposure to the technology sector and a higher standard deviation. Overall, VXF has provided higher returns than ACWI over the past 11 years.

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

Summary

VXF ACWI
Name Vanguard Extended Market Index Fund ETF Shares iShares MSCI ACWI ETF
Category Mid-Cap Growth N/A
Issuer Vanguard iShares
AUM 114.53B 16.85B
Avg. Return 15.47% 10.21%
Div. Yield 1.19% 1.39%
Expense Ratio 0.06% 0.32%

The Vanguard Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.

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%.

VXF’s dividend yield is 0.20% lower than that of ACWI (1.19% vs. 1.39%). Also, VXF yielded on average 5.26% more per year over the past decade (15.47% vs. 10.21%). The expense ratio of VXF is 0.26 percentage points lower than ACWI’s (0.06% vs. 0.32%).

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Fund Composition

Industry Exposure

VXF vs. ACWI - Industry Exposure

VXF ACWI
Technology 23.61% 20.41%
Industrials 11.31% 9.65%
Energy 2.46% 3.48%
Communication Services 7.29% 9.87%
Utilities 1.65% 2.61%
Healthcare 15.25% 11.74%
Consumer Defensive 3.09% 7.15%
Real Estate 8.16% 2.75%
Financial Services 12.56% 15.58%
Consumer Cyclical 11.35% 12.01%
Basic Materials 3.26% 4.73%

The Vanguard Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.

VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.

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%.

VXF is 3.20% more exposed to the Technology sector than ACWI (23.61% vs 20.41%). VXF’s exposure to Healthcare and Financial Services stocks is 3.51% higher and 3.02% lower respectively (15.25% vs. 11.74% and 12.56% vs. 15.58%). In total, Energy, Consumer Defensive, and Basic Materials also make up 6.55% less of the fund’s holdings compared to ACWI (8.81% vs. 15.36%).

Holdings

VXF - Holdings

VXF Holdings Weight
Square Inc A 1.2%
Zoom Video Communications Inc 1.04%
Uber Technologies Inc 0.93%
Moderna Inc 0.9%
Blackstone Group Inc 0.83%
Snap Inc Class A 0.8%
Twilio Inc A 0.73%
DocuSign Inc 0.68%
CrowdStrike Holdings Inc Class A 0.63%
Marvell Technology Inc 0.6%

VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.

Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.

ACWI - Holdings

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%.

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Risk Analysis

VXF ACWI
Mean Return 1.24 0.89
R-squared 85.73 99.96
Std. Deviation 18.04 14.05
Alpha -3.26 0.15
Beta 1.23 1
Sharpe Ratio 0.79 0.71
Treynor Ratio 10.92 9.45

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Mean Return of 1.24 with a Beta of 1.23 and a Standard Deviation of 18.04. Its R-squared is 85.73 while VXF’s Alpha is -3.26. Furthermore, the fund has a Sharpe Ratio of 0.79 and a Treynor Ratio of 10.92.

The iShares MSCI ACWI ETF (ACWI) has a Standard Deviation of 14.05 with a Beta of 1 and a Treynor Ratio of 9.45. Its R-squared is 99.96 while ACWI’s Sharpe Ratio is 0.71. Furthermore, the fund has a Mean Return of 0.89 and a Alpha of 0.15.

VXF’s Mean Return is 0.35 points higher than that of ACWI and its R-squared is 14.23 points lower. With a Standard Deviation of 18.04, VXF is slightly more volatile than ACWI. The Alpha and Beta of VXF are 3.41 points lower and 0.23 points higher than ACWI’s Alpha and Beta.

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Performance

Annual Returns

VXF vs. ACWI - Annual Returns

Year VXF ACWI
2020 32.19% 16.38%
2019 28.04% 26.7%
2018 -9.37% -9.15%
2017 18.1% 24.35%
2016 16.16% 8.22%
2015 -3.26% -2.39%
2014 7.55% 4.64%
2013 38.37% 22.91%
2012 18.48% 15.99%
2011 -3.61% -7.6%
2010 27.55% 12.31%

VXF had its best year in 2013 with an annual return of 38.37%. VXF’s worst year over the past decade yielded -9.37% and occurred in 2018. In most years the Vanguard Extended Market Index Fund ETF Shares provided moderate returns such as in 2016, 2017, and 2012 where annual returns amounted to 16.16%, 18.1%, and 18.48% 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

VXF vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VXF $10,000 $44,130 15.47%
ACWI $10,000 $27,241 10.21%

A $10,000 investment in VXF would have resulted in a final balance of $44,130. This is a profit of $34,130 over 11 years and amounts to a compound annual growth rate (CAGR) of 15.47%.

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%.

VXF’s CAGR is 5.26 percentage points higher than that of ACWI and as a result, would have yielded $16,889 more on a $10,000 investment. Thus, VXF outperformed ACWI by 5.26% annually.


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