The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between VXUS and DFAC? And which fund is better?
The expense ratio of VXUS is 0.11 percentage points lower than DFAC’s (0.08% vs. 0.19%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than DFAC over the past ten years.
In this article, we’ll compare VXUS vs. DFAC. We’ll look at industry exposure and annual returns, as well as at their fund composition and performance. Moreover, I’ll also discuss VXUS’s and DFAC’s portfolio growth, holdings, and risk metrics and examine how these affect their overall returns.
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Summary
| VXUS | DFAC | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Dimensional U.S. Core Equity 2 ETF |
| Category | Foreign Large Blend | Large Blend |
| Issuer | Vanguard | Dimensional Fund Advisors |
| AUM | 404.73B | 13.53B |
| Avg. Return | 8.41% | 13.93% |
| Div. Yield | 2.44% | 1.0% |
| Expense Ratio | 0.08% | 0.19% |
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 Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
VXUS’s dividend yield is 1.44% higher than that of DFAC (2.44% vs. 1.0%). Also, VXUS yielded on average 5.53% less per year over the past decade (8.41% vs. 13.93%). The expense ratio of VXUS is 0.11 percentage points lower than DFAC’s (0.08% vs. 0.19%).
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Fund Composition
Industry Exposure
| VXUS | DFAC | |
| Technology | 13.07% | 22.81% |
| Industrials | 12.94% | 14.13% |
| Energy | 4.55% | 2.67% |
| Communication Services | 7.06% | 7.63% |
| Utilities | 2.94% | 1.54% |
| Healthcare | 9.19% | 12.09% |
| Consumer Defensive | 7.83% | 5.94% |
| Real Estate | 3.79% | 0.37% |
| Financial Services | 17.64% | 16.17% |
| Consumer Cyclical | 12.64% | 13.09% |
| Basic Materials | 8.37% | 3.56% |
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 Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
VXUS is 1.47% more exposed to the Financial Services sector than DFAC (17.64% vs 16.17%). VXUS’s exposure to Technology and Industrials stocks is 9.74% lower and 1.19% lower respectively (13.07% vs. 22.81% and 12.94% vs. 14.13%). In total, Real Estate, Energy, and Communication Services also make up 4.73% more of the fund’s holdings compared to DFAC (15.40% vs. 10.67%).
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%.
| DFAC Holdings | Weight |
| Apple Inc | 4.7% |
| Microsoft Corp | 3.81% |
| Amazon.com Inc | 2.39% |
| Johnson & Johnson | 1.05% |
| Facebook Inc Class A | 1.05% |
| JPMorgan Chase & Co | 1.0% |
| Alphabet Inc Class C | 0.85% |
| Alphabet Inc Class A | 0.84% |
| Berkshire Hathaway Inc Class B | 0.75% |
| Visa Inc Class A | 0.74% |
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
Risk Analysis
| VXUS | DFAC | |
| Mean Return | 0.56 | 1.19 |
| R-squared | 98.39 | 95.1 |
| Std. Deviation | 15.12 | 15.55 |
| Alpha | 0.31 | -2.75 |
| Beta | 0.99 | 1.12 |
| Sharpe Ratio | 0.4 | 0.88 |
| Treynor Ratio | 5.14 | 11.85 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Beta of 0.99 with a Alpha of 0.31 and a Sharpe Ratio of 0.4. Its Standard Deviation is 15.12 while VXUS’s Treynor Ratio is 5.14. Furthermore, the fund has a Mean Return of 0.56 and a R-squared of 98.39.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a R-squared of 95.1 with a Beta of 1.12 and a Treynor Ratio of 11.85. Its Standard Deviation is 15.55 while DFAC’s Alpha is -2.75. Furthermore, the fund has a Mean Return of 1.19 and a Sharpe Ratio of 0.88.
VXUS’s Mean Return is 0.63 points lower than that of DFAC and its R-squared is 3.29 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than DFAC. The Alpha and Beta of VXUS are 3.06 points higher and 0.13 points lower than DFAC’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | DFAC |
| 2020 | 11.32% | 15.8% |
| 2019 | 21.58% | 29.54% |
| 2018 | -14.42% | -9.43% |
| 2017 | 27.52% | 18.82% |
| 2016 | 4.72% | 16.31% |
| 2015 | -4.28% | -2.53% |
| 2014 | -4.17% | 9.56% |
| 2013 | 15.16% | 37.55% |
| 2012 | 18.22% | 17.93% |
| 2011 | 0.0% | -1.96% |
| 2010 | 0.0% | 21.67% |
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 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| DFAC | $10,000 | $32,524 | 13.93% |
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 DFAC, the end total would have been $32,524. This equates to a $22,524 profit over 9 years and a compound annual growth rate (CAGR) of 13.93%.
VXUS’s CAGR is 5.53 percentage points lower than that of DFAC and as a result, would have yielded $13,209 less on a $10,000 investment. Thus, VXUS performed worse than DFAC by 5.53% annually.
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