The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between VXUS and IWS? And which fund is better?
The expense ratio of VXUS is 0.15 percentage points lower than IWS’s (0.08% vs. 0.23%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than IWS over the past ten years.
In this article, we’ll compare VXUS vs. IWS. We’ll look at performance and annual returns, as well as at their fund composition and portfolio growth. Moreover, I’ll also discuss VXUS’s and IWS’s holdings, industry exposure, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||iShares Russell Mid-Cap Value ETF|
|Category||Foreign Large Blend||Mid-Cap Value|
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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
VXUS’s dividend yield is 1.10% higher than that of IWS (2.44% vs. 1.34%). Also, VXUS yielded on average 3.94% less per year over the past decade (8.41% vs. 12.35%). The expense ratio of VXUS is 0.15 percentage points lower than IWS’s (0.08% vs. 0.23%).
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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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.
IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.
VXUS is 1.89% more exposed to the Financial Services sector than IWS (17.64% vs 15.75%). VXUS’s exposure to Technology and Industrials stocks is 1.68% higher and 1.66% lower respectively (13.07% vs. 11.39% and 12.94% vs. 14.6%). In total, Real Estate, Energy, and Communication Services also make up 5.10% less of the fund’s holdings compared to IWS (15.40% vs. 20.50%).
|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%.
|Marvell Technology Inc||0.69%|
|IHS Markit Ltd||0.62%|
|Prudential Financial Inc||0.56%|
|Otis Worldwide Corp Ordinary Shares||0.54%|
|International Flavors & Fragrances Inc||0.53%|
|Xcel Energy Inc||0.52%|
|Motorola Solutions Inc||0.52%|
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
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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 Alpha of 0.31. Its Beta is 0.99 while VXUS’s Treynor Ratio is 5.14. Furthermore, the fund has a R-squared of 98.39 and a Mean Return of 0.56.
The iShares Russell Mid-Cap Value ETF (IWS) has a Alpha of -4.11 with a Sharpe Ratio of 0.75 and a Mean Return of 1.06. Its Beta is 1.1 while IWS’s Standard Deviation is 16.03. Furthermore, the fund has a R-squared of 87.04 and a Treynor Ratio of 10.3.
VXUS’s Mean Return is 0.50 points lower than that of IWS and its R-squared is 11.35 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than IWS. The Alpha and Beta of VXUS are 4.42 points higher and 0.11 points lower than IWS’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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% 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 IWS, the end total would have been $27,000. This equates to a $17,000 profit over 9 years and a compound annual growth rate (CAGR) of 12.35%.
VXUS’s CAGR is 3.94 percentage points lower than that of IWS and as a result, would have yielded $7,685 less on a $10,000 investment. Thus, VXUS performed worse than IWS by 3.94% annually.
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