The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares S&P 500 Growth ETF (IVW) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IVW is a iShares Large Growth fund. So, what’s the difference between VXUS and IVW? And which fund is better?
The expense ratio of VXUS is 0.10 percentage points lower than IVW’s (0.08% vs. 0.18%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than IVW over the past ten years.
In this article, we’ll compare VXUS vs. IVW. We’ll look at portfolio growth and annual returns, as well as at their performance and risk metrics. Moreover, I’ll also discuss VXUS’s and IVW’s fund composition, industry exposure, and holdings and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||iShares S&P 500 Growth ETF|
|Category||Foreign Large Blend||Large Growth|
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 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.
VXUS’s dividend yield is 1.83% higher than that of IVW (2.44% vs. 0.61%). Also, VXUS yielded on average 8.33% less per year over the past decade (8.41% vs. 16.74%). The expense ratio of VXUS is 0.10 percentage points lower than IVW’s (0.08% vs. 0.18%).
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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 S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.
IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.
VXUS is 10.86% more exposed to the Financial Services sector than IVW (17.64% vs 6.78%). VXUS’s exposure to Technology and Industrials stocks is 24.73% lower and 7.22% higher respectively (13.07% vs. 37.8% and 12.94% vs. 5.72%). In total, Real Estate, Energy, and Communication Services also make up 1.21% less of the fund’s holdings compared to IVW (15.40% vs. 16.61%).
|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||4.28%|
|Alphabet Inc Class A||4.06%|
|Alphabet Inc Class C||3.86%|
|PayPal Holdings Inc||1.62%|
IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.
Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Standard Deviation of 15.12 with a Sharpe Ratio of 0.4 and a Treynor Ratio of 5.14. Its Mean Return is 0.56 while VXUS’s Alpha is 0.31. Furthermore, the fund has a R-squared of 98.39 and a Beta of 0.99.
The iShares S&P 500 Growth ETF (IVW) has a R-squared of 93.82 with a Treynor Ratio of 17.24 and a Sharpe Ratio of 1.21. Its Mean Return is 1.44 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a Beta of 0.98 and a Alpha of 2.19.
VXUS’s Mean Return is 0.88 points lower than that of IVW and its R-squared is 4.57 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than IVW. The Alpha and Beta of VXUS are 1.88 points lower and 0.01 points higher than IVW’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 2020 was the strongest year for IVW, returning 33.21% on an annual basis. The poorest year for IVW in the last ten years was 2018, with a yield of -0.17%. Most years the iShares S&P 500 Growth ETF has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 14.39%, 14.67%, and 14.84% 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 IVW, the end total would have been $43,263. This equates to a $33,263 profit over 9 years and a compound annual growth rate (CAGR) of 16.74%.
VXUS’s CAGR is 8.33 percentage points lower than that of IVW and as a result, would have yielded $23,948 less on a $10,000 investment. Thus, VXUS performed worse than IVW by 8.33% annually.
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