The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VHT is a Vanguard Health fund. So, what’s the difference between VXUS and VHT? And which fund is better?
The expense ratio of VXUS is 0.02 percentage points lower than VHT’s (0.08% vs. 0.1%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than VHT over the past ten years.
In this article, we’ll compare VXUS vs. VHT. We’ll look at performance and fund composition, as well as at their industry exposure and holdings. Moreover, I’ll also discuss VXUS’s and VHT’s portfolio growth, annual returns, and risk metrics and examine how these affect their overall returns.
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|Name||Vanguard Total International Stock Index Fund ETF Shares||Vanguard Health Care Index Fund ETF Shares|
|Category||Foreign Large Blend||Health|
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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
VXUS’s dividend yield is 1.29% higher than that of VHT (2.44% vs. 1.15%). Also, VXUS yielded on average 7.63% less per year over the past decade (8.41% vs. 16.04%). The expense ratio of VXUS is 0.02 percentage points lower than VHT’s (0.08% vs. 0.1%).
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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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
VXUS is 17.62% more exposed to the Financial Services sector than VHT (17.64% vs 0.02%). VXUS’s exposure to Technology and Industrials stocks is 13.02% higher and 12.89% higher respectively (13.07% vs. 0.05% and 12.94% vs. 0.05%). In total, Real Estate, Energy, and Communication Services also make up 15.40% more of the fund’s holdings compared to VHT (15.40% vs. 0.00%).
|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%.
|Johnson & Johnson||7.34%|
|UnitedHealth Group Inc||6.44%|
|Thermo Fisher Scientific Inc||3.37%|
|Merck & Co Inc||3.33%|
|Eli Lilly and Co||3.17%|
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a Beta of 0.99 and a Treynor Ratio of 5.14. Its Sharpe Ratio is 0.4 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Mean Return of 0.56 and a Standard Deviation of 15.12.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a Standard Deviation of 13.58 with a Alpha of 7.99 and a Mean Return of 1.33. Its Sharpe Ratio is 1.13 while VHT’s Beta is 0.75. Furthermore, the fund has a Treynor Ratio of 20.74 and a R-squared of 59.86.
VXUS’s Mean Return is 0.77 points lower than that of VHT and its R-squared is 38.53 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than VHT. The Alpha and Beta of VXUS are 7.68 points lower and 0.24 points higher than VHT’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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% 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 VHT, the end total would have been $41,448. This equates to a $31,448 profit over 9 years and a compound annual growth rate (CAGR) of 16.04%.
VXUS’s CAGR is 7.63 percentage points lower than that of VHT and as a result, would have yielded $22,133 less on a $10,000 investment. Thus, VXUS performed worse than VHT by 7.63% annually.
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