The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Russell Mid-Cap ETF (IWR) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IWR is a iShares Mid-Cap Blend fund. So, what’s the difference between VXUS and IWR? And which fund is better?
The expense ratio of VXUS is 0.11 percentage points lower than IWR’s (0.08% vs. 0.19%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than IWR over the past ten years.
In this article, we’ll compare VXUS vs. IWR. We’ll look at fund composition and holdings, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss VXUS’s and IWR’s performance, portfolio growth, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||iShares Russell Mid-Cap ETF|
|Category||Foreign Large Blend||Mid-Cap Blend|
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 ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.
VXUS’s dividend yield is 1.45% higher than that of IWR (2.44% vs. 0.99%). Also, VXUS yielded on average 5.75% less per year over the past decade (8.41% vs. 14.15%). The expense ratio of VXUS is 0.11 percentage points lower than IWR’s (0.08% vs. 0.19%).
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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 Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.
IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.
VXUS is 6.00% more exposed to the Financial Services sector than IWR (17.64% vs 11.64%). VXUS’s exposure to Technology and Industrials stocks is 6.60% lower and 1.60% lower respectively (13.07% vs. 19.67% and 12.94% vs. 14.54%). In total, Real Estate, Energy, and Communication Services also make up 1.03% less of the fund’s holdings compared to IWR (15.40% vs. 16.43%).
|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%.
|IDEXX Laboratories Inc||0.51%|
|Chipotle Mexican Grill Inc||0.47%|
|Roku Inc Class A||0.44%|
|Marvell Technology Inc||0.44%|
|Trane Technologies PLC||0.43%|
|Carrier Global Corp Ordinary Shares||0.43%|
IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.
Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a Standard Deviation of 15.12 and a Treynor Ratio of 5.14. Its Alpha is 0.31 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Mean Return of 0.56 and a Beta of 0.99.
The iShares Russell Mid-Cap ETF (IWR) has a Beta of 1.11 with a Treynor Ratio of 11.72 and a Standard Deviation of 15.66. Its Alpha is -2.8 while IWR’s Sharpe Ratio is 0.86. Furthermore, the fund has a Mean Return of 1.17 and a R-squared of 91.52.
VXUS’s Mean Return is 0.61 points lower than that of IWR and its R-squared is 6.87 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than IWR. The Alpha and Beta of VXUS are 3.11 points higher and 0.12 points lower than IWR’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 2013 was the strongest year for IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% 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 IWR, the end total would have been $32,276. This equates to a $22,276 profit over 9 years and a compound annual growth rate (CAGR) of 14.15%.
VXUS’s CAGR is 5.75 percentage points lower than that of IWR and as a result, would have yielded $12,961 less on a $10,000 investment. Thus, VXUS performed worse than IWR by 5.75% annually.
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