The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VBR is a Vanguard Small Value fund. So, what’s the difference between VXUS and VBR? And which fund is better?
The expense ratio of VXUS is 0.01 percentage points higher than VBR’s (0.08% vs. 0.07%). VXUS also has a lower exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than VBR over the past ten years.
In this article, we’ll compare VXUS vs. VBR. We’ll look at portfolio growth and performance, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss VXUS’s and VBR’s annual returns, holdings, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||Vanguard Small-Cap Value Index Fund ETF Shares|
|Category||Foreign Large Blend||Small 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 Vanguard Small-Cap Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.
VXUS’s dividend yield is 0.84% higher than that of VBR (2.44% vs. 1.6%). Also, VXUS yielded on average 3.88% less per year over the past decade (8.41% vs. 12.28%). The expense ratio of VXUS is 0.01 percentage points higher than VBR’s (0.08% vs. 0.07%).
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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 Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.
VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.
VXUS is 2.40% less exposed to the Financial Services sector than VBR (17.64% vs 20.04%). VXUS’s exposure to Technology and Industrials stocks is 4.68% higher and 5.50% lower respectively (13.07% vs. 8.39% and 12.94% vs. 18.44%). In total, Real Estate, Energy, and Communication Services also make up 2.44% less of the fund’s holdings compared to VBR (15.40% vs. 17.84%).
|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%.
|Diamondback Energy Inc||0.55%|
|VICI Properties Inc Ordinary Shares||0.54%|
|Nuance Communications Inc||0.5%|
|Molina Healthcare Inc||0.48%|
|Howmet Aerospace Inc||0.44%|
|Apollo Global Management Inc Class A||0.42%|
|Brown & Brown Inc||0.41%|
VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.
Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Treynor Ratio of 5.14 with a Standard Deviation of 15.12 and a Beta of 0.99. Its Sharpe Ratio is 0.4 while VXUS’s Alpha is 0.31. Furthermore, the fund has a Mean Return of 0.56 and a R-squared of 98.39.
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Sharpe Ratio of 0.67 with a Alpha of -5.09 and a Mean Return of 1.08. Its Beta is 1.23 while VBR’s Standard Deviation is 18.37. Furthermore, the fund has a Treynor Ratio of 9.15 and a R-squared of 82.2.
VXUS’s Mean Return is 0.52 points lower than that of VBR and its R-squared is 16.19 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than VBR. The Alpha and Beta of VXUS are 5.40 points higher and 0.24 points lower than VBR’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 VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% 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 VBR, the end total would have been $27,197. This equates to a $17,197 profit over 9 years and a compound annual growth rate (CAGR) of 12.28%.
VXUS’s CAGR is 3.88 percentage points lower than that of VBR and as a result, would have yielded $7,882 less on a $10,000 investment. Thus, VXUS performed worse than VBR by 3.88% annually.
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