The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between VXUS and IUSB? And which fund is better?
The expense ratio of VXUS is 0.02 percentage points higher than IUSB’s (0.08% vs. 0.06%). VXUS also has a high exposure to the financial services sector while IUSB is mostly comprised of AAA bonds. Overall, VXUS has provided higher returns than IUSB over the past ten years.
In this article, we’ll compare VXUS vs. IUSB. We’ll look at industry exposure and annual returns, as well as at their holdings and risk metrics. Moreover, I’ll also discuss VXUS’s and IUSB’s portfolio growth, fund composition, and performance and examine how these affect their overall returns.
Summary
| VXUS | IUSB | |
| NameVanguard Total International Stock Index Fund ETF SharesiShares Core Total USD Bond Market ETF | ||
| Category | Foreign Large Blend | N/A |
| Issuer | Vanguard | iShares |
| AUM | 404.73B | 14.49B |
| Avg. Return | 8.41% | 4.13% |
| Div. Yield | 2.44% | 2.1% |
| Expense Ratio | 0.08% | 0.06% |
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 Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
VXUS’s dividend yield is 0.34% higher than that of IUSB (2.44% vs. 2.1%). Also, VXUS yielded on average 4.28% more per year over the past decade (8.41% vs. 4.13%). The expense ratio of VXUS is 0.02 percentage points higher than IUSB’s (0.08% vs. 0.06%).
Fund Composition
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%.
| IUSB Bond Sectors | Weight |
| AAA | 58.32% |
| BBB | 16.98% |
| A | 12.27% |
| BB | 4.33% |
| AA | 3.36% |
| B | 2.8% |
| Others | 1.01% |
| Below B | 0.92% |
| US Government | 0.0% |
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
Risk Analysis
| VXUS | IUSB | |
| Mean Return | 0.56 | 0 |
| R-squared | 98.39 | 0 |
| Std. Deviation | 15.12 | 0 |
| Alpha | 0.31 | 0 |
| Beta | 0.99 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.14 | 0 |
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 Treynor Ratio of 5.14. Its Beta is 0.99 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Standard Deviation of 15.12 and a Sharpe Ratio of 0.4.
The iShares Core Total USD Bond Market ETF (IUSB) has a Standard Deviation of 0 with a Treynor Ratio of 0 and a Beta of 0. Its Mean Return is 0 while IUSB’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.
VXUS’s Mean Return is 0.56 points higher than that of IUSB and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than IUSB. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than IUSB’s Alpha and Beta.
Performance
Annual Returns
| Year | VXUS | IUSB |
| 2020 | 11.32% | 7.59% |
| 2019 | 21.58% | 9.26% |
| 2018 | -14.42% | -0.38% |
| 2017 | 27.52% | 4.06% |
| 2016 | 4.72% | 3.78% |
| 2015 | -4.28% | 0.46% |
| 2014 | -4.17% | 0.0% |
| 2013 | 15.16% | 0.0% |
| 2012 | 18.22% | 0.0% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 0.0% |
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 IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $14,805 | 8.41% |
| IUSB | $10,000 | $12,704 | 4.13% |
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 IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
VXUS’s CAGR is 4.28 percentage points higher than that of IUSB and as a result, would have yielded $2,101 more on a $10,000 investment. Thus, VXUS outperformed IUSB by 4.28% annually.
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