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VXUS vs. VYM: What’s The Difference?

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard High Dividend Yield Index Fund ETF Shares (VYM) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and VYM is a Vanguard Large Value fund. So, what’s the difference between VXUS and VYM? And which fund is better?

The expense ratio of VXUS is 0.02 percentage points higher than VYM’s (0.08% vs. 0.06%). VXUS also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than VYM over the past ten years.

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

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Summary

VXUSVYM
NameVanguard Total International Stock Index Fund ETF SharesVanguard High Dividend Yield Index Fund ETF Shares
CategoryForeign Large BlendLarge Value
IssuerVanguardVanguard
AUM404.73B48.5B
Avg. Return8.41%12.20%
Div. Yield2.44%2.79%
Expense Ratio0.08%0.06%

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 High Dividend Yield Index Fund ETF Shares (VYM) is a Large Value fund that is issued by Vanguard. It currently has 48.5B total assets under management and has yielded an average annual return of 12.20% over the past 10 years. The fund has a dividend yield of 2.79% with an expense ratio of 0.06%.

VXUS’s dividend yield is 0.35% lower than that of VYM (2.44% vs. 2.79%). Also, VXUS yielded on average 3.79% less per year over the past decade (8.41% vs. 12.20%). The expense ratio of VXUS is 0.02 percentage points higher than VYM’s (0.08% vs. 0.06%).

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Fund Composition

Industry Exposure

VXUS vs. VYM - Industry Exposure

VXUSVYM
Technology13.07%9.77%
Industrials12.94%10.14%
Energy4.55%7.12%
Communication Services7.06%5.91%
Utilities2.94%7.27%
Healthcare9.19%13.61%
Consumer Defensive7.83%14.13%
Real Estate3.79%0.02%
Financial Services17.64%22.05%
Consumer Cyclical12.64%5.57%
Basic Materials8.37%4.41%

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 High Dividend Yield Index Fund ETF Shares (VYM) has the most exposure to the Financial Services sector at 22.05%. This is followed by Consumer Defensive and Healthcare at 14.13% and 13.61% respectively. Basic Materials (4.41%), Consumer Cyclical (5.57%), and Communication Services (5.91%) only make up 15.89% of the fund’s total assets.

VYM’s mid-section with moderate exposure is comprised of Energy, Utilities, Technology, Industrials, and Healthcare stocks at 7.12%, 7.27%, 9.77%, 10.14%, and 13.61%.

VXUS is 4.41% less exposed to the Financial Services sector than VYM (17.64% vs 22.05%). VXUS’s exposure to Technology and Industrials stocks is 3.30% higher and 2.80% higher respectively (13.07% vs. 9.77% and 12.94% vs. 10.14%). In total, Real Estate, Energy, and Communication Services also make up 2.35% more of the fund’s holdings compared to VYM (15.40% vs. 13.05%).

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%.

VYM - Holdings

VYM HoldingsWeight
JPMorgan Chase & Co3.53%
Johnson & Johnson3.28%
The Home Depot Inc2.59%
Procter & Gamble Co2.48%
Bank of America Corp2.35%
Exxon Mobil Corp2.02%
Comcast Corp Class A1.96%
Verizon Communications Inc1.75%
Intel Corp1.71%
Cisco Systems Inc1.69%

VYM’s Top Holdings are JPMorgan Chase & Co, Johnson & Johnson, The Home Depot Inc, Procter & Gamble Co, and Bank of America Corp at 3.53%, 3.28%, 2.59%, 2.48%, and 2.35%.

Exxon Mobil Corp (2.02%), Comcast Corp Class A (1.96%), and Verizon Communications Inc (1.75%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the VYM’s holdings at 1.71% and 1.69%.

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Risk Analysis

VXUSVYM
Mean Return0.561.04
R-squared98.3988.88
Std. Deviation15.1212.69
Alpha0.31-0.7
Beta0.990.88
Sharpe Ratio0.40.93
Treynor Ratio5.1413.24

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

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has a R-squared of 88.88 with a Mean Return of 1.04 and a Sharpe Ratio of 0.93. Its Beta is 0.88 while VYM’s Alpha is -0.7. Furthermore, the fund has a Treynor Ratio of 13.24 and a Standard Deviation of 12.69.

VXUS’s Mean Return is 0.48 points lower than that of VYM and its R-squared is 9.51 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than VYM. The Alpha and Beta of VXUS are 1.01 points higher and 0.11 points higher than VYM’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. VYM - Annual Returns

YearVXUSVYM
202011.32%1.14%
201921.58%24.2%
2018-14.42%-5.87%
201727.52%16.42%
20164.72%16.87%
2015-4.28%0.33%
2014-4.17%13.47%
201315.16%30.26%
201218.22%12.68%
20110.0%10.5%
20100.0%14.17%

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 VYM, returning 30.26% on an annual basis. The poorest year for VYM in the last ten years was 2018, with a yield of -5.87%. Most years the Vanguard High Dividend Yield Index Fund ETF Shares has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 12.68%, 13.47%, and 14.17% respectively.

Portfolio Growth

VXUS vs. VYM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$19,3158.41%
VYM$10,000$26,88212.20%

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 VYM, the end total would have been $26,882. This equates to a $16,882 profit over 9 years and a compound annual growth rate (CAGR) of 12.20%.

VXUS’s CAGR is 3.79 percentage points lower than that of VYM and as a result, would have yielded $7,567 less on a $10,000 investment. Thus, VXUS performed worse than VYM by 3.79% annually.


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