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VXUS vs. IWP: What’s The Difference?

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between VXUS and IWP? And which fund is better?

The expense ratio of VXUS is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than IWP over the past ten years.

In this article, we’ll compare VXUS vs. IWP. We’ll look at portfolio growth and annual returns, as well as at their fund composition and performance. Moreover, I’ll also discuss VXUS’s and IWP’s holdings, risk metrics, and industry exposure and examine how these affect their overall returns.

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Summary

VXUSIWP
NameVanguard Total International Stock Index Fund ETF SharesiShares Russell Mid-Cap Growth ETF
CategoryForeign Large BlendMid-Cap Growth
IssuerVanguardiShares
AUM404.73B15.7B
Avg. Return8.41%16.75%
Div. Yield2.44%0.26%
Expense Ratio0.08%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 Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

VXUS’s dividend yield is 2.18% higher than that of IWP (2.44% vs. 0.26%). Also, VXUS yielded on average 8.34% less per year over the past decade (8.41% vs. 16.75%). The expense ratio of VXUS is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%).

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Fund Composition

Industry Exposure

VXUS vs. IWP - Industry Exposure

VXUSIWP
Technology13.07%33.88%
Industrials12.94%14.09%
Energy4.55%1.51%
Communication Services7.06%6.32%
Utilities2.94%0.16%
Healthcare9.19%16.79%
Consumer Defensive7.83%2.32%
Real Estate3.79%2.46%
Financial Services17.64%4.52%
Consumer Cyclical12.64%16.09%
Basic Materials8.37%1.86%

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 Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

VXUS is 13.12% more exposed to the Financial Services sector than IWP (17.64% vs 4.52%). VXUS’s exposure to Technology and Industrials stocks is 20.81% lower and 1.15% lower respectively (13.07% vs. 33.88% and 12.94% vs. 14.09%). In total, Real Estate, Energy, and Communication Services also make up 5.11% more of the fund’s holdings compared to IWP (15.40% vs. 10.29%).

Holdings

VXUS - Holdings

VXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.62%
Tencent Holdings Ltd1.41%
Alibaba Group Holding Ltd Ordinary Shares1.26%
Nestle SA1.1%
Samsung Electronics Co Ltd1.05%
ASML Holding NV0.86%
Roche Holding AG0.81%
Toyota Motor Corp0.67%
LVMH Moet Hennessy Louis Vuitton SE0.61%
Novartis AG0.6%

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%.

IWP - Holdings

IWP HoldingsWeight
IDEXX Laboratories Inc1.3%
DocuSign Inc1.3%
Roku Inc Class A1.29%
Match Group Inc1.06%
Chipotle Mexican Grill Inc1.06%
Pinterest Inc1.05%
Veeva Systems Inc Class A1.04%
Palantir Technologies Inc Ordinary Shares – Class A1.04%
Lululemon Athletica Inc1.01%
DexCom Inc1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

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Risk Analysis

VXUSIWP
Mean Return0.561.27
R-squared98.3987.01
Std. Deviation15.1216.05
Alpha0.31-1.03
Beta0.991.1
Sharpe Ratio0.40.91
Treynor Ratio5.1412.98

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Beta of 0.99 with a R-squared of 98.39 and a Sharpe Ratio of 0.4. Its Treynor Ratio is 5.14 while VXUS’s Alpha is 0.31. Furthermore, the fund has a Mean Return of 0.56 and a Standard Deviation of 15.12.

The iShares Russell Mid-Cap Growth ETF (IWP) has a Sharpe Ratio of 0.91 with a Beta of 1.1 and a Treynor Ratio of 12.98. Its Standard Deviation is 16.05 while IWP’s R-squared is 87.01. Furthermore, the fund has a Mean Return of 1.27 and a Alpha of -1.03.

VXUS’s Mean Return is 0.71 points lower than that of IWP and its R-squared is 11.38 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than IWP. The Alpha and Beta of VXUS are 1.34 points higher and 0.11 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. IWP - Annual Returns

YearVXUSIWP
202011.32%35.29%
201921.58%35.14%
2018-14.42%-4.95%
201727.52%24.98%
20164.72%7.15%
2015-4.28%-0.39%
2014-4.17%11.68%
201315.16%35.44%
201218.22%15.62%
20110.0%-1.82%
20100.0%26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

VXUS vs. IWP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$19,3158.41%
IWP$10,000$40,54016.75%

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 IWP, the end total would have been $40,540. This equates to a $30,540 profit over 9 years and a compound annual growth rate (CAGR) of 16.75%.

VXUS’s CAGR is 8.34 percentage points lower than that of IWP and as a result, would have yielded $21,225 less on a $10,000 investment. Thus, VXUS performed worse than IWP by 8.34% annually.


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