Skip to content

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.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Summary

VXFACWI
NameVanguard Extended Market Index Fund ETF SharesiShares MSCI ACWI ETF
CategoryMid-Cap GrowthN/A
IssuerVanguardiShares
AUM114.53B16.85B
Avg. Return15.47%10.21%
Div. Yield1.19%1.39%
Expense Ratio0.06%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%).

FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

VXF vs. ACWI - Industry Exposure

VXFACWI
Technology23.61%20.41%
Industrials11.31%9.65%
Energy2.46%3.48%
Communication Services7.29%9.87%
Utilities1.65%2.61%
Healthcare15.25%11.74%
Consumer Defensive3.09%7.15%
Real Estate8.16%2.75%
Financial Services12.56%15.58%
Consumer Cyclical11.35%12.01%
Basic Materials3.26%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 HoldingsWeight
Square Inc A1.2%
Zoom Video Communications Inc1.04%
Uber Technologies Inc0.93%
Moderna Inc0.9%
Blackstone Group Inc0.83%
Snap Inc Class A0.8%
Twilio Inc A0.73%
DocuSign Inc0.68%
CrowdStrike Holdings Inc Class A0.63%
Marvell Technology Inc0.6%

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 HoldingsWeight
Apple Inc3.44%
Microsoft Corp2.91%
Amazon.com Inc2.21%
Facebook Inc A1.25%
Alphabet Inc Class C1.12%
Alphabet Inc A1.09%
Taiwan Semiconductor Manufacturing Co Ltd0.79%
Tesla Inc0.78%
NVIDIA Corp0.74%
JPMorgan Chase & Co0.71%

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%.

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Empower Personal Capital).

Risk Analysis

VXFACWI
Mean Return1.240.89
R-squared85.7399.96
Std. Deviation18.0414.05
Alpha-3.260.15
Beta1.231
Sharpe Ratio0.790.71
Treynor Ratio10.929.45

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.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Performance

Annual Returns

VXF vs. ACWI - Annual Returns

YearVXFACWI
202032.19%16.38%
201928.04%26.7%
2018-9.37%-9.15%
201718.1%24.35%
201616.16%8.22%
2015-3.26%-2.39%
20147.55%4.64%
201338.37%22.91%
201218.48%15.99%
2011-3.61%-7.6%
201027.55%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

FundInitial BalanceFinal BalanceCAGR
VXF$10,000$44,13015.47%
ACWI$10,000$27,24110.21%

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.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

9125d72911bdc1f2dd2d1918a15aaf4c?s=250&d=mm&r=g

Leave a Reply

Your email address will not be published. Required fields are marked *