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
| VXUS | IWP | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | iShares Russell Mid-Cap Growth ETF |
| Category | Foreign Large Blend | Mid-Cap Growth |
| Issuer | Vanguard | iShares |
| AUM | 404.73B | 15.7B |
| Avg. Return | 8.41% | 16.75% |
| Div. Yield | 2.44% | 0.26% |
| 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 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 | IWP | |
| Technology | 13.07% | 33.88% |
| Industrials | 12.94% | 14.09% |
| Energy | 4.55% | 1.51% |
| Communication Services | 7.06% | 6.32% |
| Utilities | 2.94% | 0.16% |
| Healthcare | 9.19% | 16.79% |
| Consumer Defensive | 7.83% | 2.32% |
| Real Estate | 3.79% | 2.46% |
| Financial Services | 17.64% | 4.52% |
| Consumer Cyclical | 12.64% | 16.09% |
| Basic Materials | 8.37% | 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 | 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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
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%.
Risk Analysis
| VXUS | IWP | |
| Mean Return | 0.56 | 1.27 |
| R-squared | 98.39 | 87.01 |
| Std. Deviation | 15.12 | 16.05 |
| Alpha | 0.31 | -1.03 |
| Beta | 0.99 | 1.1 |
| Sharpe Ratio | 0.4 | 0.91 |
| Treynor Ratio | 5.14 | 12.98 |
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
| Year | VXUS | IWP |
| 2020 | 11.32% | 35.29% |
| 2019 | 21.58% | 35.14% |
| 2018 | -14.42% | -4.95% |
| 2017 | 27.52% | 24.98% |
| 2016 | 4.72% | 7.15% |
| 2015 | -4.28% | -0.39% |
| 2014 | -4.17% | 11.68% |
| 2013 | 15.16% | 35.44% |
| 2012 | 18.22% | 15.62% |
| 2011 | 0.0% | -1.82% |
| 2010 | 0.0% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| IWP | $10,000 | $40,540 | 16.75% |
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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