The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and ITOT is a iShares Large Blend fund. So, what’s the difference between VXUS and ITOT? And which fund is better?
The expense ratio of VXUS is 0.05 percentage points higher than ITOT’s (0.08% vs. 0.03%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than ITOT over the past ten years.
In this article, we’ll compare VXUS vs. ITOT. We’ll look at fund composition and holdings, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss VXUS’s and ITOT’s industry exposure, portfolio growth, and performance and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||iShares Core S&P Total U.S. Stock Market ETF|
|Category||Foreign Large Blend||Large Blend|
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 S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
VXUS’s dividend yield is 1.24% higher than that of ITOT (2.44% vs. 1.2%). Also, VXUS yielded on average 6.18% less per year over the past decade (8.41% vs. 14.59%). The expense ratio of VXUS is 0.05 percentage points higher than ITOT’s (0.08% vs. 0.03%).
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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 S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.
ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.
VXUS is 3.95% more exposed to the Financial Services sector than ITOT (17.64% vs 13.69%). VXUS’s exposure to Technology and Industrials stocks is 11.42% lower and 3.73% higher respectively (13.07% vs. 24.49% and 12.94% vs. 9.21%). In total, Real Estate, Energy, and Communication Services also make up 1.32% less of the fund’s holdings compared to ITOT (15.40% vs. 16.72%).
|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%.
|Facebook Inc Class A||1.89%|
|Alphabet Inc Class A||1.79%|
|Alphabet Inc Class C||1.71%|
|Berkshire Hathaway Inc Class B||1.17%|
|JPMorgan Chase & Co||1.02%|
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Mean Return of 0.56 with a Treynor Ratio of 5.14 and a Sharpe Ratio of 0.4. Its R-squared is 98.39 while VXUS’s Standard Deviation is 15.12. Furthermore, the fund has a Beta of 0.99 and a Alpha of 0.31.
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a Treynor Ratio of 14.13 and a Mean Return of 1.27. Its Beta is 1.03 while ITOT’s Sharpe Ratio is 1.04. Furthermore, the fund has a R-squared of 99.4 and a Standard Deviation of 14.02.
VXUS’s Mean Return is 0.71 points lower than that of ITOT and its R-squared is 1.01 points lower. With a Standard Deviation of 15.12, VXUS is slightly more volatile than ITOT. The Alpha and Beta of VXUS are 0.85 points higher and 0.04 points lower than ITOT’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 2013 was the strongest year for ITOT, returning 32.67% on an annual basis. The poorest year for ITOT in the last ten years was 2018, with a yield of -5.27%. Most years the iShares Core S&P Total U.S. Stock Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.01%, 15.98%, and 16.15% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 ITOT, the end total would have been $35,871. This equates to a $25,871 profit over 9 years and a compound annual growth rate (CAGR) of 14.59%.
VXUS’s CAGR is 6.18 percentage points lower than that of ITOT and as a result, would have yielded $16,556 less on a $10,000 investment. Thus, VXUS performed worse than ITOT by 6.18% annually.
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