The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between VXUS and IWN? And which fund is better?
The expense ratio of VXUS is 0.16 percentage points lower than IWN’s (0.08% vs. 0.24%). VXUS also has a lower exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than IWN over the past ten years.
In this article, we’ll compare VXUS vs. IWN. We’ll look at holdings and risk metrics, as well as at their fund composition and performance. Moreover, I’ll also discuss VXUS’s and IWN’s annual returns, portfolio growth, and industry exposure and examine how these affect their overall returns.
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Summary
| VXUS | IWN | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | iShares Russell 2000 Value ETF |
| Category | Foreign Large Blend | Small Value |
| Issuer | Vanguard | iShares |
| AUM | 404.73B | 15.48B |
| Avg. Return | 8.41% | 10.96% |
| Div. Yield | 2.44% | 1.26% |
| Expense Ratio | 0.08% | 0.24% |
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 Russell 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.
VXUS’s dividend yield is 1.18% higher than that of IWN (2.44% vs. 1.26%). Also, VXUS yielded on average 2.56% less per year over the past decade (8.41% vs. 10.96%). The expense ratio of VXUS is 0.16 percentage points lower than IWN’s (0.08% vs. 0.24%).
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Fund Composition
Industry Exposure
| VXUS | IWN | |
| Technology | 13.07% | 6.02% |
| Industrials | 12.94% | 14.58% |
| Energy | 4.55% | 5.84% |
| Communication Services | 7.06% | 4.17% |
| Utilities | 2.94% | 4.69% |
| Healthcare | 9.19% | 10.94% |
| Consumer Defensive | 7.83% | 3.77% |
| Real Estate | 3.79% | 14.36% |
| Financial Services | 17.64% | 22.97% |
| Consumer Cyclical | 12.64% | 8.39% |
| Basic Materials | 8.37% | 4.29% |
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 Russell 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.
IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.
VXUS is 5.33% less exposed to the Financial Services sector than IWN (17.64% vs 22.97%). VXUS’s exposure to Technology and Industrials stocks is 7.05% higher and 1.64% lower respectively (13.07% vs. 6.02% and 12.94% vs. 14.58%). In total, Real Estate, Energy, and Communication Services also make up 8.97% less of the fund’s holdings compared to IWN (15.40% vs. 24.37%).
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%.
| IWN Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 1.06% |
| Tenet Healthcare Corp | 0.47% |
| Stag Industrial Inc | 0.47% |
| Ovintiv Inc | 0.45% |
| EMCOR Group Inc | 0.42% |
| Valley National Bancorp | 0.37% |
| Chesapeake Energy Corp Ordinary Shares – New | 0.37% |
| Agree Realty Corp | 0.36% |
| Macy’s Inc | 0.35% |
| Essent Group Ltd | 0.35% |
IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.
Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.
Risk Analysis
| VXUS | IWN | |
| Mean Return | 0.56 | 1.01 |
| R-squared | 98.39 | 72.64 |
| Std. Deviation | 15.12 | 19.28 |
| Alpha | 0.31 | -6.32 |
| Beta | 0.99 | 1.21 |
| Sharpe Ratio | 0.4 | 0.59 |
| Treynor Ratio | 5.14 | 8.3 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a R-squared of 98.39 with a Alpha of 0.31 and a Beta of 0.99. Its Mean Return is 0.56 while VXUS’s Sharpe Ratio is 0.4. Furthermore, the fund has a Standard Deviation of 15.12 and a Treynor Ratio of 5.14.
The iShares Russell 2000 Value ETF (IWN) has a Beta of 1.21 with a Standard Deviation of 19.28 and a Mean Return of 1.01. Its Sharpe Ratio is 0.59 while IWN’s Treynor Ratio is 8.3. Furthermore, the fund has a R-squared of 72.64 and a Alpha of -6.32.
VXUS’s Mean Return is 0.45 points lower than that of IWN and its R-squared is 25.75 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than IWN. The Alpha and Beta of VXUS are 6.63 points higher and 0.22 points lower than IWN’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | IWN |
| 2020 | 11.32% | 4.5% |
| 2019 | 21.58% | 22.17% |
| 2018 | -14.42% | -12.94% |
| 2017 | 27.52% | 7.73% |
| 2016 | 4.72% | 31.64% |
| 2015 | -4.28% | -7.53% |
| 2014 | -4.17% | 4.13% |
| 2013 | 15.16% | 34.3% |
| 2012 | 18.22% | 17.92% |
| 2011 | 0.0% | -5.64% |
| 2010 | 0.0% | 24.29% |
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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| IWN | $10,000 | $24,036 | 10.96% |
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 IWN, the end total would have been $24,036. This equates to a $14,036 profit over 9 years and a compound annual growth rate (CAGR) of 10.96%.
VXUS’s CAGR is 2.56 percentage points lower than that of IWN and as a result, would have yielded $4,721 less on a $10,000 investment. Thus, VXUS performed worse than IWN by 2.56% annually.
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