The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between VXUS and VLUE? And which fund is better?
The expense ratio of VXUS is 0.07 percentage points lower than VLUE’s (0.08% vs. 0.15%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than VLUE over the past ten years.
In this article, we’ll compare VXUS vs. VLUE. We’ll look at risk metrics and fund composition, as well as at their performance and industry exposure. Moreover, I’ll also discuss VXUS’s and VLUE’s holdings, portfolio growth, and annual returns and examine how these affect their overall returns.
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|NameVanguard Total International Stock Index Fund ETF SharesiShares MSCI USA Value Factor ETF|
|Category||Foreign Large Blend||Large 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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
VXUS’s dividend yield is 0.55% higher than that of VLUE (2.44% vs. 1.89%). Also, VXUS yielded on average 0.50% less per year over the past decade (8.41% vs. 8.91%). The expense ratio of VXUS is 0.07 percentage points lower than VLUE’s (0.08% vs. 0.15%).
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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 MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
VXUS is 6.68% more exposed to the Financial Services sector than VLUE (17.64% vs 10.96%). VXUS’s exposure to Technology and Industrials stocks is 13.82% lower and 3.80% higher respectively (13.07% vs. 26.89% and 12.94% vs. 9.14%). In total, Real Estate, Energy, and Communication Services also make up 0.60% less of the fund’s holdings compared to VLUE (15.40% vs. 16.00%).
|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%.
|General Motors Co||3.19%|
|Micron Technology Inc||3.14%|
|Cisco Systems Inc||3.05%|
|International Business Machines Corp||2.76%|
|Ford Motor Co||2.23%|
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a R-squared of 98.39 with a Sharpe Ratio of 0.4 and a Alpha of 0.31. Its Treynor Ratio is 5.14 while VXUS’s Mean Return is 0.56. Furthermore, the fund has a Beta of 0.99 and a Standard Deviation of 15.12.
The iShares MSCI USA Value Factor ETF (VLUE) has a R-squared of 0 with a Sharpe Ratio of 0 and a Treynor Ratio of 0. Its Beta is 0 while VLUE’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
VXUS’s Mean Return is 0.56 points higher than that of VLUE and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than VLUE. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than VLUE’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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VXUS would have resulted in a final balance of $14,187. This is a profit of $4,187 over 7 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
VXUS’s CAGR is 0.50 percentage points lower than that of VLUE and as a result, would have yielded $3,060 less on a $10,000 investment. Thus, VXUS performed worse than VLUE by 0.50% annually.
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