The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IVE is a iShares Large Value fund. So, what’s the difference between VXUS and IVE? And which fund is better?
The expense ratio of VXUS is 0.10 percentage points lower than IVE’s (0.08% vs. 0.18%). VXUS also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than IVE over the past ten years.
In this article, we’ll compare VXUS vs. IVE. We’ll look at risk metrics and portfolio growth, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss VXUS’s and IVE’s holdings, performance, and annual returns and examine how these affect their overall returns.
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Summary
| VXUS | IVE | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | iShares S&P 500 Value ETF |
| Category | Foreign Large Blend | Large Value |
| Issuer | Vanguard | iShares |
| AUM | 404.73B | 22.4B |
| Avg. Return | 8.41% | 11.68% |
| Div. Yield | 2.44% | 1.88% |
| Expense Ratio | 0.08% | 0.18% |
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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
VXUS’s dividend yield is 0.56% higher than that of IVE (2.44% vs. 1.88%). Also, VXUS yielded on average 3.28% less per year over the past decade (8.41% vs. 11.68%). The expense ratio of VXUS is 0.10 percentage points lower than IVE’s (0.08% vs. 0.18%).
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Fund Composition
Industry Exposure
| VXUS | IVE | |
| Technology | 13.07% | 9.41% |
| Industrials | 12.94% | 12.19% |
| Energy | 4.55% | 5.43% |
| Communication Services | 7.06% | 6.4% |
| Utilities | 2.94% | 4.82% |
| Healthcare | 9.19% | 15.4% |
| Consumer Defensive | 7.83% | 9.23% |
| Real Estate | 3.79% | 4.38% |
| Financial Services | 17.64% | 22.06% |
| Consumer Cyclical | 12.64% | 7.68% |
| Basic Materials | 8.37% | 2.99% |
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 S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
VXUS is 4.42% less exposed to the Financial Services sector than IVE (17.64% vs 22.06%). VXUS’s exposure to Technology and Industrials stocks is 3.66% higher and 0.75% higher respectively (13.07% vs. 9.41% and 12.94% vs. 12.19%). In total, Real Estate, Energy, and Communication Services also make up 0.81% less of the fund’s holdings compared to IVE (15.40% vs. 16.21%).
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%.
| IVE Holdings | Weight |
| Berkshire Hathaway Inc Class B | 3.05% |
| JPMorgan Chase & Co | 2.65% |
| The Walt Disney Co | 1.85% |
| Bank of America Corp | 1.67% |
| Johnson & Johnson | 1.57% |
| Exxon Mobil Corp | 1.41% |
| Pfizer Inc | 1.38% |
| Cisco Systems Inc | 1.35% |
| Verizon Communications Inc | 1.33% |
| Intel Corp | 1.25% |
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
Risk Analysis
| VXUS | IVE | |
| Mean Return | 0.56 | 1.05 |
| R-squared | 98.39 | 92.08 |
| Std. Deviation | 15.12 | 14.3 |
| Alpha | 0.31 | -2.9 |
| Beta | 0.99 | 1.01 |
| Sharpe Ratio | 0.4 | 0.83 |
| Treynor Ratio | 5.14 | 11.41 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a Treynor Ratio of 5.14 and a Alpha of 0.31. Its Mean Return is 0.56 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Beta of 0.99 and a Standard Deviation of 15.12.
The iShares S&P 500 Value ETF (IVE) has a Beta of 1.01 with a Mean Return of 1.05 and a R-squared of 92.08. Its Alpha is -2.9 while IVE’s Sharpe Ratio is 0.83. Furthermore, the fund has a Treynor Ratio of 11.41 and a Standard Deviation of 14.3.
VXUS’s Mean Return is 0.49 points lower than that of IVE and its R-squared is 6.31 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than IVE. The Alpha and Beta of VXUS are 3.21 points higher and 0.02 points lower than IVE’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | IVE |
| 2020 | 11.32% | 1.24% |
| 2019 | 21.58% | 31.71% |
| 2018 | -14.42% | -9.09% |
| 2017 | 27.52% | 15.19% |
| 2016 | 4.72% | 17.17% |
| 2015 | -4.28% | -3.24% |
| 2014 | -4.17% | 12.14% |
| 2013 | 15.16% | 31.69% |
| 2012 | 18.22% | 17.45% |
| 2011 | 0.0% | -0.63% |
| 2010 | 0.0% | 14.9% |
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 IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| IVE | $10,000 | $27,458 | 11.68% |
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 IVE, the end total would have been $27,458. This equates to a $17,458 profit over 9 years and a compound annual growth rate (CAGR) of 11.68%.
VXUS’s CAGR is 3.28 percentage points lower than that of IVE and as a result, would have yielded $8,143 less on a $10,000 investment. Thus, VXUS performed worse than IVE by 3.28% annually.
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