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VXUS vs. VT: What’s The Difference?

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between VXUS and VT? And which fund is better?

VXUS and VT have the same expense ratio: 0.08%. VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than VT over the past ten years.

In this article, we’ll compare VXUS vs. VT. We’ll look at fund composition and holdings, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss VXUS’s and VT’s performance, risk metrics, and portfolio growth and examine how these affect their overall returns.

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Summary

VXUSVT
NameVanguard Total International Stock Index Fund ETF SharesVanguard Total World Stock Index Fund ETF Shares
CategoryForeign Large BlendN/A
IssuerVanguardVanguard
AUM404.73B30.44B
Avg. Return8.41%10.42%
Div. Yield2.44%1.65%
Expense Ratio0.08%0.08%

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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.

VXUS’s dividend yield is 0.79% higher than that of VT (2.44% vs. 1.65%). Also, VXUS yielded on average 2.01% less per year over the past decade (8.41% vs. 10.42%). VXUS and VT have the same expense ratio: 0.08%.

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Fund Composition

Industry Exposure

VXUS vs. VT - Industry Exposure

VXUSVT
Technology13.07%19.63%
Industrials12.94%10.7%
Energy4.55%3.48%
Communication Services7.06%9.02%
Utilities2.94%2.6%
Healthcare9.19%11.58%
Consumer Defensive7.83%6.71%
Real Estate3.79%3.64%
Financial Services17.64%15.36%
Consumer Cyclical12.64%12.32%
Basic Materials8.37%4.97%

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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.

VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.

VXUS is 2.28% more exposed to the Financial Services sector than VT (17.64% vs 15.36%). VXUS’s exposure to Technology and Industrials stocks is 6.56% lower and 2.24% higher respectively (13.07% vs. 19.63% and 12.94% vs. 10.7%). In total, Real Estate, Energy, and Communication Services also make up 0.74% less of the fund’s holdings compared to VT (15.40% vs. 16.14%).

Holdings

VXUS - Holdings

VXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.62%
Tencent Holdings Ltd1.41%
Alibaba Group Holding Ltd Ordinary Shares1.26%
Nestle SA1.1%
Samsung Electronics Co Ltd1.05%
ASML Holding NV0.86%
Roche Holding AG0.81%
Toyota Motor Corp0.67%
LVMH Moet Hennessy Louis Vuitton SE0.61%
Novartis AG0.6%

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%.

VT - Holdings

VT HoldingsWeight
Apple Inc2.85%
Microsoft Corp2.71%
Amazon.com Inc1.98%
Facebook Inc Class A1.1%
Alphabet Inc Class A0.97%
Alphabet Inc Class C0.95%
Tesla Inc0.7%
NVIDIA Corp0.64%
JPMorgan Chase & Co0.62%
Tencent Holdings Ltd0.6%

VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.

Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.

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Risk Analysis

VXUSVT
Mean Return0.560.9
R-squared98.3999.35
Std. Deviation15.1214.19
Alpha0.310.2
Beta0.991.01
Sharpe Ratio0.40.71
Treynor Ratio5.149.5

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a R-squared of 98.39 and a Mean Return of 0.56. Its Beta is 0.99 while VXUS’s Standard Deviation is 15.12. Furthermore, the fund has a Alpha of 0.31 and a Treynor Ratio of 5.14.

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Alpha of 0.2 with a R-squared of 99.35 and a Beta of 1.01. Its Sharpe Ratio is 0.71 while VT’s Standard Deviation is 14.19. Furthermore, the fund has a Treynor Ratio of 9.5 and a Mean Return of 0.9.

VXUS’s Mean Return is 0.34 points lower than that of VT and its R-squared is 0.96 points lower. With a Standard Deviation of 15.12, VXUS is slightly more volatile than VT. The Alpha and Beta of VXUS are 0.11 points higher and 0.02 points lower than VT’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. VT - Annual Returns

YearVXUSVT
202011.32%16.74%
201921.58%26.8%
2018-14.42%-9.67%
201727.52%24.19%
20164.72%8.77%
2015-4.28%-1.88%
2014-4.17%3.97%
201315.16%22.98%
201218.22%17.33%
20110.0%-7.71%
20100.0%13.05%

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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.

Portfolio Growth

VXUS vs. VT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$19,3158.41%
VT$10,000$26,58710.42%

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 VT, the end total would have been $26,587. This equates to a $16,587 profit over 9 years and a compound annual growth rate (CAGR) of 10.42%.

VXUS’s CAGR is 2.01 percentage points lower than that of VT and as a result, would have yielded $7,272 less on a $10,000 investment. Thus, VXUS performed worse than VT by 2.01% annually.


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