The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between VXUS and VOE? And which fund is better?
The expense ratio of VXUS is 0.01 percentage points higher than VOE’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 VOE over the past ten years.
In this article, we’ll compare VXUS vs. VOE. We’ll look at holdings and performance, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss VXUS’s and VOE’s risk metrics, annual returns, and portfolio growth and examine how these affect their overall returns.
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Summary
| VXUS | VOE | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Vanguard Mid-Cap Value Index Fund ETF Shares |
| Category | Foreign Large Blend | Mid-Cap Value |
| Issuer | Vanguard | Vanguard |
| AUM | 404.73B | 26.78B |
| Avg. Return | 8.41% | 12.52% |
| Div. Yield | 2.44% | 1.87% |
| Expense Ratio | 0.08% | 0.07% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
VXUS’s dividend yield is 0.57% higher than that of VOE (2.44% vs. 1.87%). Also, VXUS yielded on average 4.12% less per year over the past decade (8.41% vs. 12.52%). The expense ratio of VXUS is 0.01 percentage points higher than VOE’s (0.08% vs. 0.07%).
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Fund Composition
Industry Exposure
| VXUS | VOE | |
| Technology | 13.07% | 9.85% |
| Industrials | 12.94% | 9.4% |
| Energy | 4.55% | 5.69% |
| Communication Services | 7.06% | 5.27% |
| Utilities | 2.94% | 10.93% |
| Healthcare | 9.19% | 7.04% |
| Consumer Defensive | 7.83% | 4.85% |
| Real Estate | 3.79% | 11.48% |
| Financial Services | 17.64% | 18.26% |
| Consumer Cyclical | 12.64% | 11.8% |
| Basic Materials | 8.37% | 5.44% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
VXUS is 0.62% less exposed to the Financial Services sector than VOE (17.64% vs 18.26%). VXUS’s exposure to Technology and Industrials stocks is 3.22% higher and 3.54% higher respectively (13.07% vs. 9.85% and 12.94% vs. 9.4%). In total, Real Estate, Energy, and Communication Services also make up 7.04% less of the fund’s holdings compared to VOE (15.40% vs. 22.44%).
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%.
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
Risk Analysis
| VXUS | VOE | |
| Mean Return | 0.56 | 1.05 |
| R-squared | 98.39 | 88.76 |
| Std. Deviation | 15.12 | 15.98 |
| Alpha | 0.31 | -3.77 |
| Beta | 0.99 | 1.11 |
| Sharpe Ratio | 0.4 | 0.75 |
| Treynor Ratio | 5.14 | 10.19 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a Alpha of 0.31 and a Treynor Ratio of 5.14. Its Standard Deviation is 15.12 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Beta of 0.99 and a Mean Return of 0.56.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Treynor Ratio of 10.19 with a R-squared of 88.76 and a Standard Deviation of 15.98. Its Beta is 1.11 while VOE’s Mean Return is 1.05. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Alpha of -3.77.
VXUS’s Mean Return is 0.49 points lower than that of VOE and its R-squared is 9.63 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than VOE. The Alpha and Beta of VXUS are 4.08 points higher and 0.12 points lower than VOE’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | VOE |
| 2020 | 11.32% | 2.5% |
| 2019 | 21.58% | 27.98% |
| 2018 | -14.42% | -12.41% |
| 2017 | 27.52% | 17.05% |
| 2016 | 4.72% | 15.26% |
| 2015 | -4.28% | -1.8% |
| 2014 | -4.17% | 13.98% |
| 2013 | 15.16% | 37.65% |
| 2012 | 18.22% | 16.04% |
| 2011 | 0.0% | -0.32% |
| 2010 | 0.0% | 21.83% |
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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| VOE | $10,000 | $27,713 | 12.52% |
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 VOE, the end total would have been $27,713. This equates to a $17,713 profit over 9 years and a compound annual growth rate (CAGR) of 12.52%.
VXUS’s CAGR is 4.12 percentage points lower than that of VOE and as a result, would have yielded $8,398 less on a $10,000 investment. Thus, VXUS performed worse than VOE by 4.12% annually.
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