The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between VXUS and ARKK? And which fund is better?
The expense ratio of VXUS is 0.67 percentage points lower than ARKK’s (0.08% vs. 0.75%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than ARKK over the past ten years.
In this article, we’ll compare VXUS vs. ARKK. We’ll look at holdings and portfolio growth, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss VXUS’s and ARKK’s risk metrics, annual returns, and performance and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||ARK Innovation ETF|
|Category||Foreign Large Blend||Mid-Cap Growth|
|Issuer||Vanguard||ARK ETF Trust|
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 ARK Innovation ETF (ARKK) is a Mid-Cap Growth fund that is issued by ARK ETF Trust. It currently has 25.52B total assets under management and has yielded an average annual return of 55.45% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.75%.
VXUS’s dividend yield is 2.44% higher than that of ARKK (2.44% vs. 0.0%). Also, VXUS yielded on average 47.04% less per year over the past decade (8.41% vs. 55.45%). The expense ratio of VXUS is 0.67 percentage points lower than ARKK’s (0.08% vs. 0.75%).
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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 ARK Innovation ETF (ARKK) has the most exposure to the Technology sector at 30.5%. This is followed by Healthcare and Communication Services at 29.47% and 25.01% respectively. Utilities (0.0%), Energy (0.0%), and Financial Services (0.04%) only make up 0.04% of the fund’s total assets.
ARKK’s mid-section with moderate exposure is comprised of Real Estate, Consumer Defensive, Industrials, Consumer Cyclical, and Communication Services stocks at 0.51%, 0.93%, 2.11%, 11.42%, and 25.01%.
VXUS is 17.60% more exposed to the Financial Services sector than ARKK (17.64% vs 0.04%). VXUS’s exposure to Technology and Industrials stocks is 17.43% lower and 10.83% higher respectively (13.07% vs. 30.5% and 12.94% vs. 2.11%). In total, Real Estate, Energy, and Communication Services also make up 10.12% less of the fund’s holdings compared to ARKK (15.40% vs. 25.52%).
|Taiwan Semiconductor Manufacturing Co Ltd||1.62%|
|Tencent Holdings Ltd||1.41%|
|Alibaba Group Holding Ltd Ordinary Shares||1.26%|
|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%|
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%.
|Roku Inc Class A||6.48%|
|Teladoc Health Inc||5.76%|
|Square Inc A||4.37%|
|Zoom Video Communications Inc||4.36%|
|Shopify Inc A||4.27%|
|Spotify Technology SA||3.68%|
|Twilio Inc A||3.66%|
|Coinbase Global Inc Ordinary Shares – Class A||3.65%|
|Unity Software Inc Ordinary Shares||3.41%|
ARKK’s Top Holdings are Tesla Inc, Roku Inc Class A, Teladoc Health Inc, Square Inc A, and Zoom Video Communications Inc at 9.56%, 6.48%, 5.76%, 4.37%, and 4.36%.
Shopify Inc A (4.27%), Spotify Technology SA (3.68%), and Twilio Inc A (3.66%) have a slightly smaller but still significant weight. Coinbase Global Inc Ordinary Shares – Class A and Unity Software Inc Ordinary Shares are also represented in the ARKK’s holdings at 3.65% and 3.41%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a Mean Return of 0.56 and a Beta of 0.99. Its Standard Deviation is 15.12 while VXUS’s Sharpe Ratio is 0.4. Furthermore, the fund has a R-squared of 98.39 and a Treynor Ratio of 5.14.
The ARK Innovation ETF (ARKK) has a Beta of 0 with a Mean Return of 0 and a Sharpe Ratio of 0. Its Treynor Ratio is 0 while ARKK’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Standard Deviation of 0.
VXUS’s Mean Return is 0.56 points higher than that of ARKK and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than ARKK. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than ARKK’s Alpha and Beta.
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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 2020 was the strongest year for ARKK, returning 152.52% on an annual basis. The poorest year for ARKK in the last ten years was 2016, with a yield of -1.96%. Most years the ARK Innovation ETF has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 3.58% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VXUS would have resulted in a final balance of $15,467. This is a profit of $5,467 over 5 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in ARKK, the end total would have been $65,218. This equates to a $55,218 profit over 5 years and a compound annual growth rate (CAGR) of 55.45%.
VXUS’s CAGR is 47.04 percentage points lower than that of ARKK and as a result, would have yielded $49,751 less on a $10,000 investment. Thus, VXUS performed worse than ARKK by 47.04% annually.
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