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VXUS vs. TQQQ: What’s The Difference?

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between VXUS and TQQQ? And which fund is better?

The expense ratio of VXUS is 0.87 percentage points lower than TQQQ’s (0.08% vs. 0.95%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than TQQQ over the past ten years.

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

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Summary

VXUSTQQQ
NameVanguard Total International Stock Index Fund ETF SharesProShares UltraPro QQQ
CategoryForeign Large BlendTrading–Leveraged Equity
IssuerVanguardProShares
AUM404.73B12.41B
Avg. Return8.41%61.22%
Div. Yield2.44%0.0%
Expense Ratio0.08%0.95%

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 ProShares UltraPro QQQ (TQQQ) is a Trading–Leveraged Equity fund that is issued by ProShares. It currently has 12.41B total assets under management and has yielded an average annual return of 61.22% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.95%.

VXUS’s dividend yield is 2.44% higher than that of TQQQ (2.44% vs. 0.0%). Also, VXUS yielded on average 52.82% less per year over the past decade (8.41% vs. 61.22%). The expense ratio of VXUS is 0.87 percentage points lower than TQQQ’s (0.08% vs. 0.95%).

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Fund Composition

Industry Exposure

VXUS vs. TQQQ - Industry Exposure

VXUSTQQQ
Technology13.07%0.0%
Industrials12.94%0.0%
Energy4.55%0.0%
Communication Services7.06%0.0%
Utilities2.94%0.0%
Healthcare9.19%0.0%
Consumer Defensive7.83%0.0%
Real Estate3.79%0.0%
Financial Services17.64%0.0%
Consumer Cyclical12.64%0.0%
Basic Materials8.37%0.0%

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 ProShares UltraPro QQQ (TQQQ) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

TQQQ’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

VXUS is 17.64% more exposed to the Financial Services sector than TQQQ (17.64% vs 0.0%). VXUS’s exposure to Technology and Industrials stocks is 13.07% higher and 12.94% higher respectively (13.07% vs. 0.0% and 12.94% vs. 0.0%). In total, Real Estate, Energy, and Communication Services also make up 15.40% more of the fund’s holdings compared to TQQQ (15.40% vs. 0.00%).

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%.

TQQQ - Holdings

TQQQ HoldingsWeight
Nasdaq 100 Index Swap Goldman Sachs International45.11%
Nasdaq 100 Index Swap Societe Generale44.73%
Nasdaq 100 Index Swap Bnp Paribas38.05%
Nasdaq 100 Index Swap Bank Of America Na31.53%
Nasdaq 100 Index Swap Citibank Na31.49%
Nasdaq 100 Index Swap Jp Morgan Securities26.2%
Apple Inc7.49%
Microsoft Corp6.69%
Nasdaq 100 Index Swap Credit Suisse International5.9%
Amazon.com Inc5.68%

TQQQ’s Top Holdings are Nasdaq 100 Index Swap Goldman Sachs International, Nasdaq 100 Index Swap Societe Generale, Nasdaq 100 Index Swap Bnp Paribas, Nasdaq 100 Index Swap Bank Of America Na, and Nasdaq 100 Index Swap Citibank Na at 45.11%, 44.73%, 38.05%, 31.53%, and 31.49%.

Nasdaq 100 Index Swap Jp Morgan Securities (26.2%), Apple Inc (7.49%), and Microsoft Corp (6.69%) have a slightly smaller but still significant weight. Nasdaq 100 Index Swap Credit Suisse International and Amazon.com Inc are also represented in the TQQQ’s holdings at 5.9% and 5.68%.

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Risk Analysis

VXUSTQQQ
Mean Return0.564.65
R-squared98.3983.64
Std. Deviation15.1250.08
Alpha0.317.29
Beta0.993.37
Sharpe Ratio0.41.1
Treynor Ratio5.1415.65

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Standard Deviation of 15.12 with a Mean Return of 0.56 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 Beta of 0.99 and a R-squared of 98.39.

The ProShares UltraPro QQQ (TQQQ) has a Alpha of 7.29 with a R-squared of 83.64 and a Treynor Ratio of 15.65. Its Standard Deviation is 50.08 while TQQQ’s Sharpe Ratio is 1.1. Furthermore, the fund has a Beta of 3.37 and a Mean Return of 4.65.

VXUS’s Mean Return is 4.09 points lower than that of TQQQ and its R-squared is 14.75 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than TQQQ. The Alpha and Beta of VXUS are 6.98 points lower and 2.38 points lower than TQQQ’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. TQQQ - Annual Returns

YearVXUSTQQQ
202011.32%109.85%
201921.58%133.93%
2018-14.42%-19.65%
201727.52%118.65%
20164.72%11.04%
2015-4.28%17.41%
2014-4.17%56.82%
201315.16%139.98%
201218.22%51.95%
20110.0%-7.77%
20100.0%0.0%

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 TQQQ, returning 139.98% on an annual basis. The poorest year for TQQQ in the last ten years was 2018, with a yield of -19.65%. Most years the ProShares UltraPro QQQ has given investors modest returns, such as in 2015, 2012, and 2014, when gains were 17.41%, 51.95%, and 56.82% respectively.

Portfolio Growth

VXUS vs. TQQQ - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$19,3158.41%
TQQQ$10,000$642,97161.22%

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 TQQQ, the end total would have been $642,971. This equates to a $632,971 profit over 9 years and a compound annual growth rate (CAGR) of 61.22%.

VXUS’s CAGR is 52.82 percentage points lower than that of TQQQ and as a result, would have yielded $623,656 less on a $10,000 investment. Thus, VXUS performed worse than TQQQ by 52.82% annually.


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