The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between VXUS and ACWI? And which fund is better?
The expense ratio of VXUS is 0.24 percentage points lower than ACWI’s (0.08% vs. 0.32%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than ACWI over the past ten years.
In this article, we’ll compare VXUS vs. ACWI. We’ll look at holdings and performance, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss VXUS’s and ACWI’s annual returns, industry exposure, and risk metrics and examine how these affect their overall returns.
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Summary
| VXUS | ACWI | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | iShares MSCI ACWI ETF |
| Category | Foreign Large Blend | N/A |
| Issuer | Vanguard | iShares |
| AUM | 404.73B | 16.85B |
| Avg. Return | 8.41% | 10.21% |
| Div. Yield | 2.44% | 1.39% |
| Expense Ratio | 0.08% | 0.32% |
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%.
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%.
VXUS’s dividend yield is 1.05% higher than that of ACWI (2.44% vs. 1.39%). Also, VXUS yielded on average 1.81% less per year over the past decade (8.41% vs. 10.21%). The expense ratio of VXUS is 0.24 percentage points lower than ACWI’s (0.08% vs. 0.32%).
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Fund Composition
Industry Exposure
| VXUS | ACWI | |
| Technology | 13.07% | 20.41% |
| Industrials | 12.94% | 9.65% |
| Energy | 4.55% | 3.48% |
| Communication Services | 7.06% | 9.87% |
| Utilities | 2.94% | 2.61% |
| Healthcare | 9.19% | 11.74% |
| Consumer Defensive | 7.83% | 7.15% |
| Real Estate | 3.79% | 2.75% |
| Financial Services | 17.64% | 15.58% |
| Consumer Cyclical | 12.64% | 12.01% |
| Basic Materials | 8.37% | 4.73% |
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%.
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%.
VXUS is 2.06% more exposed to the Financial Services sector than ACWI (17.64% vs 15.58%). VXUS’s exposure to Technology and Industrials stocks is 7.34% lower and 3.29% higher respectively (13.07% vs. 20.41% and 12.94% vs. 9.65%). In total, Real Estate, Energy, and Communication Services also make up 0.70% less of the fund’s holdings compared to ACWI (15.40% vs. 16.10%).
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%.
| 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%.
Risk Analysis
| VXUS | ACWI | |
| Mean Return | 0.56 | 0.89 |
| R-squared | 98.39 | 99.96 |
| Std. Deviation | 15.12 | 14.05 |
| Alpha | 0.31 | 0.15 |
| Beta | 0.99 | 1 |
| Sharpe Ratio | 0.4 | 0.71 |
| Treynor Ratio | 5.14 | 9.45 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a Treynor Ratio of 5.14 and a R-squared of 98.39. Its Standard Deviation is 15.12 while VXUS’s Mean Return is 0.56. Furthermore, the fund has a Beta of 0.99 and a Sharpe Ratio of 0.4.
The iShares MSCI ACWI ETF (ACWI) has a Standard Deviation of 14.05 with a R-squared of 99.96 and a Alpha of 0.15. Its Treynor Ratio is 9.45 while ACWI’s Beta is 1. Furthermore, the fund has a Mean Return of 0.89 and a Sharpe Ratio of 0.71.
VXUS’s Mean Return is 0.33 points lower than that of ACWI and its R-squared is 1.57 points lower. With a Standard Deviation of 15.12, VXUS is slightly more volatile than ACWI. The Alpha and Beta of VXUS are 0.16 points higher and 0.01 points lower than ACWI’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | ACWI |
| 2020 | 11.32% | 16.38% |
| 2019 | 21.58% | 26.7% |
| 2018 | -14.42% | -9.15% |
| 2017 | 27.52% | 24.35% |
| 2016 | 4.72% | 8.22% |
| 2015 | -4.28% | -2.39% |
| 2014 | -4.17% | 4.64% |
| 2013 | 15.16% | 22.91% |
| 2012 | 18.22% | 15.99% |
| 2011 | 0.0% | -7.6% |
| 2010 | 0.0% | 12.31% |
VXUS had its best year in 2017 with an annual return of 27.52%. VXUS’s worst year over the past decade yielded -14.42% and occurred in 2018. In most years the Vanguard Total International Stock Index Fund ETF Shares provided moderate returns such as in 2010, 2016, and 2020 where annual returns amounted to 0.0%, 4.72%, and 11.32% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| ACWI | $10,000 | $26,250 | 10.21% |
A $10,000 investment in VXUS would have resulted in a final balance of $19,315. This is a profit of $9,315 over 9 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in ACWI, the end total would have been $26,250. This equates to a $16,250 profit over 9 years and a compound annual growth rate (CAGR) of 10.21%.
VXUS’s CAGR is 1.81 percentage points lower than that of ACWI and as a result, would have yielded $6,935 less on a $10,000 investment. Thus, VXUS performed worse than ACWI by 1.81% annually.
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