The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Small-Cap Index Fund ETF Shares (VB) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VB is a Vanguard Small Blend fund. So, what’s the difference between VXUS and VB? And which fund is better?
The expense ratio of VXUS is 0.03 percentage points higher than VB’s (0.08% vs. 0.05%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than VB over the past ten years.
In this article, we’ll compare VXUS vs. VB. We’ll look at industry exposure and holdings, as well as at their performance and risk metrics. Moreover, I’ll also discuss VXUS’s and VB’s portfolio growth, annual returns, and fund composition and examine how these affect their overall returns.
Summary
| VXUS | VB | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Vanguard Small-Cap Index Fund ETF Shares |
| Category | Foreign Large Blend | Small Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 404.73B | 137.72B |
| Avg. Return | 8.41% | 14.25% |
| Div. Yield | 2.44% | 1.14% |
| Expense Ratio | 0.08% | 0.05% |
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 Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.
VXUS’s dividend yield is 1.30% higher than that of VB (2.44% vs. 1.14%). Also, VXUS yielded on average 5.85% less per year over the past decade (8.41% vs. 14.25%). The expense ratio of VXUS is 0.03 percentage points higher than VB’s (0.08% vs. 0.05%).
Fund Composition
Industry Exposure
| VXUS | VB | |
| Technology | 13.07% | 16.85% |
| Industrials | 12.94% | 16.11% |
| Energy | 4.55% | 3.67% |
| Communication Services | 7.06% | 2.4% |
| Utilities | 2.94% | 2.19% |
| Healthcare | 9.19% | 14.34% |
| Consumer Defensive | 7.83% | 4.14% |
| Real Estate | 3.79% | 9.56% |
| Financial Services | 17.64% | 13.06% |
| Consumer Cyclical | 12.64% | 13.03% |
| Basic Materials | 8.37% | 4.63% |
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 Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.
VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.
VXUS is 4.58% more exposed to the Financial Services sector than VB (17.64% vs 13.06%). VXUS’s exposure to Technology and Industrials stocks is 3.78% lower and 3.17% lower respectively (13.07% vs. 16.85% and 12.94% vs. 16.11%). In total, Real Estate, Energy, and Communication Services also make up 0.23% less of the fund’s holdings compared to VB (15.40% vs. 15.63%).
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%.
| VB Holdings | Weight |
| Charles River Laboratories International Inc | 0.34% |
| Pool Corp | 0.32% |
| Bio-Techne Corp | 0.32% |
| Avantor Inc | 0.32% |
| PerkinElmer Inc | 0.31% |
| Diamondback Energy Inc | 0.31% |
| VICI Properties Inc Ordinary Shares | 0.3% |
| IDEX Corp | 0.3% |
| Entegris Inc | 0.3% |
| Novavax Inc | 0.29% |
VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.
Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.
Risk Analysis
| VXUS | VB | |
| Mean Return | 0.56 | 1.15 |
| R-squared | 98.39 | 85.03 |
| Std. Deviation | 15.12 | 17.82 |
| Alpha | 0.31 | -4.02 |
| Beta | 0.99 | 1.21 |
| Sharpe Ratio | 0.4 | 0.74 |
| Treynor Ratio | 5.14 | 10.15 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a R-squared of 98.39 and a Beta of 0.99. Its Treynor Ratio is 5.14 while VXUS’s Sharpe Ratio is 0.4. Furthermore, the fund has a Mean Return of 0.56 and a Standard Deviation of 15.12.
The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Treynor Ratio of 10.15 with a Alpha of -4.02 and a Sharpe Ratio of 0.74. Its Standard Deviation is 17.82 while VB’s Beta is 1.21. Furthermore, the fund has a Mean Return of 1.15 and a R-squared of 85.03.
VXUS’s Mean Return is 0.59 points lower than that of VB and its R-squared is 13.36 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than VB. The Alpha and Beta of VXUS are 4.33 points higher and 0.22 points lower than VB’s Alpha and Beta.
Performance
Annual Returns
| Year | VXUS | VB |
| 2020 | 11.32% | 19.08% |
| 2019 | 21.58% | 27.37% |
| 2018 | -14.42% | -9.3% |
| 2017 | 27.52% | 16.24% |
| 2016 | 4.72% | 18.31% |
| 2015 | -4.28% | -3.65% |
| 2014 | -4.17% | 7.51% |
| 2013 | 15.16% | 37.8% |
| 2012 | 18.22% | 18.22% |
| 2011 | 0.0% | -2.68% |
| 2010 | 0.0% | 27.89% |
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 VB, returning 37.8% on an annual basis. The poorest year for VB in the last ten years was 2018, with a yield of -9.3%. Most years the Vanguard Small-Cap Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2016, when gains were 16.24%, 18.22%, and 18.31% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| VB | $10,000 | $31,925 | 14.25% |
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 VB, the end total would have been $31,925. This equates to a $21,925 profit over 9 years and a compound annual growth rate (CAGR) of 14.25%.
VXUS’s CAGR is 5.85 percentage points lower than that of VB and as a result, would have yielded $12,610 less on a $10,000 investment. Thus, VXUS performed worse than VB by 5.85% annually.
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