The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between VXUS and DGRO? And which fund is better?
VXUS and DGRO have the same expense ratio: 0.08%. VXUS also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than DGRO over the past ten years.
In this article, we’ll compare VXUS vs. DGRO. We’ll look at fund composition and holdings, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VXUS’s and DGRO’s performance, risk metrics, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||iShares Core Dividend Growth ETF|
|Category||Foreign Large Blend||Large Value|
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 Core Dividend Growth ETF (DGRO) is a Large Value fund that is issued by iShares. It currently has 20B total assets under management and has yielded an average annual return of 12.46% over the past 10 years. The fund has a dividend yield of 2.04% with an expense ratio of 0.08%.
VXUS’s dividend yield is 0.40% higher than that of DGRO (2.44% vs. 2.04%). Also, VXUS yielded on average 4.05% less per year over the past decade (8.41% vs. 12.46%). VXUS and DGRO have the same expense ratio: 0.08%.
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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 iShares Core Dividend Growth ETF (DGRO) has the most exposure to the Technology sector at 18.98%. This is followed by Financial Services and Healthcare at 18.47% and 17.55% respectively. Energy (0.11%), Basic Materials (2.83%), and Communication Services (4.53%) only make up 7.47% of the fund’s total assets.
DGRO’s mid-section with moderate exposure is comprised of Utilities, Consumer Cyclical, Consumer Defensive, Industrials, and Healthcare stocks at 7.34%, 7.42%, 10.24%, 12.52%, and 17.55%.
VXUS is 0.83% less exposed to the Financial Services sector than DGRO (17.64% vs 18.47%). VXUS’s exposure to Technology and Industrials stocks is 5.91% lower and 0.42% higher respectively (13.07% vs. 18.98% and 12.94% vs. 12.52%). In total, Real Estate, Energy, and Communication Services also make up 10.76% more of the fund’s holdings compared to DGRO (15.40% vs. 4.64%).
|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%.
|Johnson & Johnson||2.87%|
|Procter & Gamble Co||2.79%|
|Verizon Communications Inc||2.68%|
|JPMorgan Chase & Co||2.57%|
|The Home Depot Inc||2.35%|
|Merck & Co Inc||2.11%|
|Cisco Systems Inc||1.98%|
DGRO’s Top Holdings are Microsoft Corp, Apple Inc, Pfizer Inc, Johnson & Johnson, and Procter & Gamble Co at 3.29%, 3.26%, 2.89%, 2.87%, and 2.79%.
Verizon Communications Inc (2.68%), JPMorgan Chase & Co (2.57%), and The Home Depot Inc (2.35%) have a slightly smaller but still significant weight. Merck & Co Inc and Cisco Systems Inc are also represented in the DGRO’s holdings at 2.11% and 1.98%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a Sharpe Ratio of 0.4 and a Mean Return of 0.56. Its R-squared is 98.39 while VXUS’s Beta is 0.99. Furthermore, the fund has a Standard Deviation of 15.12 and a Treynor Ratio of 5.14.
The iShares Core Dividend Growth ETF (DGRO) has a Standard Deviation of 0 with a R-squared of 0 and a Treynor Ratio of 0. Its Alpha is 0 while DGRO’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.
VXUS’s Mean Return is 0.56 points higher than that of DGRO and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than DGRO. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than DGRO’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 2019 was the strongest year for DGRO, returning 30.02% on an annual basis. The poorest year for DGRO in the last ten years was 2018, with a yield of -2.24%. Most years the iShares Core Dividend Growth ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VXUS would have resulted in a final balance of $14,805. This is a profit of $4,805 over 6 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in DGRO, the end total would have been $19,580. This equates to a $9,580 profit over 6 years and a compound annual growth rate (CAGR) of 12.46%.
VXUS’s CAGR is 4.05 percentage points lower than that of DGRO and as a result, would have yielded $4,775 less on a $10,000 investment. Thus, VXUS performed worse than DGRO by 4.05% annually.
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