The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and XLC is a SPDR State Street Global Advisors Communications fund. So, what’s the difference between VXUS and XLC? And which fund is better?
The expense ratio of VXUS is 0.04 percentage points lower than XLC’s (0.08% vs. 0.12%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than XLC over the past ten years.
In this article, we’ll compare VXUS vs. XLC. We’ll look at portfolio growth and industry exposure, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss VXUS’s and XLC’s annual returns, performance, and holdings and examine how these affect their overall returns.
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Summary
| VXUS | XLC | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Communication Services Select Sector SPDR Fund |
| Category | Foreign Large Blend | Communications |
| Issuer | Vanguard | SPDR State Street Global Advisors |
| AUM | 404.73B | 14.09B |
| Avg. Return | 8.41% | 29.04% |
| Div. Yield | 2.44% | 0.62% |
| Expense Ratio | 0.08% | 0.12% |
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 Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors. It currently has 14.09B total assets under management and has yielded an average annual return of 29.04% over the past 10 years. The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.
VXUS’s dividend yield is 1.82% higher than that of XLC (2.44% vs. 0.62%). Also, VXUS yielded on average 20.63% less per year over the past decade (8.41% vs. 29.04%). The expense ratio of VXUS is 0.04 percentage points lower than XLC’s (0.08% vs. 0.12%).
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Fund Composition
Industry Exposure
| VXUS | XLC | |
| Technology | 13.07% | 0.0% |
| Industrials | 12.94% | 0.0% |
| Energy | 4.55% | 0.0% |
| Communication Services | 7.06% | 100.0% |
| Utilities | 2.94% | 0.0% |
| Healthcare | 9.19% | 0.0% |
| Consumer Defensive | 7.83% | 0.0% |
| Real Estate | 3.79% | 0.0% |
| Financial Services | 17.64% | 0.0% |
| Consumer Cyclical | 12.64% | 0.0% |
| Basic Materials | 8.37% | 0.0% |
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 Communication Services Select Sector SPDR Fund (XLC) has the most exposure to the Communication Services sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
XLC’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
VXUS is 17.64% more exposed to the Financial Services sector than XLC (17.64% vs 0.0%). VXUS’s exposure to Technology and Industrials stocks is 13.07% higher and 12.94% higher respectively (13.07% vs. 0.0% and 12.94% vs. 0.0%). In total, Real Estate, Energy, and Communication Services also make up 84.60% less of the fund’s holdings compared to XLC (15.40% vs. 100.00%).
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%.
| XLC Holdings | Weight |
| Facebook Inc A | 23.75% |
| Alphabet Inc A | 11.49% |
| Alphabet Inc Class C | 11.16% |
| Netflix Inc | 4.78% |
| Charter Communications Inc A | 4.65% |
| Comcast Corp Class A | 4.44% |
| T-Mobile US Inc | 4.41% |
| The Walt Disney Co | 4.39% |
| AT&T Inc | 4.35% |
| Verizon Communications Inc | 4.33% |
XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.
Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight. AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.
Risk Analysis
| VXUS | XLC | |
| Mean Return | 0.56 | 0 |
| R-squared | 98.39 | 0 |
| Std. Deviation | 15.12 | 0 |
| Alpha | 0.31 | 0 |
| Beta | 0.99 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.14 | 0 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Treynor Ratio of 5.14 with a Mean Return of 0.56 and a Standard Deviation of 15.12. Its Beta is 0.99 while VXUS’s Sharpe Ratio is 0.4. Furthermore, the fund has a Alpha of 0.31 and a R-squared of 98.39.
The Communication Services Select Sector SPDR Fund (XLC) has a Beta of 0 with a Mean Return of 0 and a Alpha of 0. Its R-squared is 0 while XLC’s Standard Deviation is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.
VXUS’s Mean Return is 0.56 points higher than that of XLC and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than XLC. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than XLC’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | XLC |
| 2020 | 11.32% | 26.85% |
| 2019 | 21.58% | 31.22% |
| 2018 | -14.42% | 0.0% |
| 2017 | 27.52% | 0.0% |
| 2016 | 4.72% | 0.0% |
| 2015 | -4.28% | 0.0% |
| 2014 | -4.17% | 0.0% |
| 2013 | 15.16% | 0.0% |
| 2012 | 18.22% | 0.0% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 0.0% |
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 XLC, returning 31.22% on an annual basis. The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%. Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $13,534 | 8.41% |
| XLC | $10,000 | $16,645 | 29.04% |
A $10,000 investment in VXUS would have resulted in a final balance of $13,534. This is a profit of $3,534 over 2 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in XLC, the end total would have been $16,645. This equates to a $6,645 profit over 2 years and a compound annual growth rate (CAGR) of 29.04%.
VXUS’s CAGR is 20.63 percentage points lower than that of XLC and as a result, would have yielded $3,111 less on a $10,000 investment. Thus, VXUS performed worse than XLC by 20.63% annually.
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