The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Industrial Select Sector SPDR Fund (XLI) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and XLI is a SPDR State Street Global Advisors Industrials fund. So, what’s the difference between VXUS and XLI? And which fund is better?
The expense ratio of VXUS is 0.04 percentage points lower than XLI’s (0.08% vs. 0.12%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than XLI over the past ten years.
In this article, we’ll compare VXUS vs. XLI. We’ll look at portfolio growth and fund composition, as well as at their holdings and performance. Moreover, I’ll also discuss VXUS’s and XLI’s industry exposure, risk metrics, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||Industrial Select Sector SPDR Fund|
|Category||Foreign Large Blend||Industrials|
|Issuer||Vanguard||SPDR State Street Global Advisors|
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 Industrial Select Sector SPDR Fund (XLI) is a Industrials fund that is issued by SPDR State Street Global Advisors. It currently has 19.33B total assets under management and has yielded an average annual return of 14.44% over the past 10 years. The fund has a dividend yield of 1.25% with an expense ratio of 0.12%.
VXUS’s dividend yield is 1.19% higher than that of XLI (2.44% vs. 1.25%). Also, VXUS yielded on average 6.04% less per year over the past decade (8.41% vs. 14.44%). The expense ratio of VXUS is 0.04 percentage points lower than XLI’s (0.08% vs. 0.12%).
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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 Industrial Select Sector SPDR Fund (XLI) has the most exposure to the Industrials sector at 97.49%. This is followed by Technology and Consumer Cyclical at 1.82% and 0.69% respectively. Financial Services (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
XLI’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Consumer Cyclical stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.69%.
VXUS is 17.64% more exposed to the Financial Services sector than XLI (17.64% vs 0.0%). VXUS’s exposure to Technology and Industrials stocks is 11.25% higher and 84.55% lower respectively (13.07% vs. 1.82% and 12.94% vs. 97.49%). In total, Real Estate, Energy, and Communication Services also make up 15.40% more of the fund’s holdings compared to XLI (15.40% vs. 0.00%).
|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%.
|Honeywell International Inc||4.9%|
|United Parcel Service Inc Class B||4.84%|
|Union Pacific Corp||4.7%|
|Raytheon Technologies Corp||4.16%|
|General Electric Co||3.8%|
|Deere & Co||3.54%|
|Lockheed Martin Corp||2.98%|
XLI’s Top Holdings are Honeywell International Inc, United Parcel Service Inc Class B, Union Pacific Corp, Boeing Co, and Raytheon Technologies Corp at 4.9%, 4.84%, 4.7%, 4.24%, and 4.16%.
Caterpillar Inc (3.84%), General Electric Co (3.8%), and 3M Co (3.7%) have a slightly smaller but still significant weight. Deere & Co and Lockheed Martin Corp are also represented in the XLI’s holdings at 3.54% and 2.98%.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Treynor Ratio of 5.14 with a Beta of 0.99 and a R-squared of 98.39. Its Alpha is 0.31 while VXUS’s Sharpe Ratio is 0.4. Furthermore, the fund has a Standard Deviation of 15.12 and a Mean Return of 0.56.
The Industrial Select Sector SPDR Fund (XLI) has a Alpha of 2.38 with a R-squared of 78.97 and a Treynor Ratio of 11.34. Its Standard Deviation is 17.13 while XLI’s Mean Return is 1.14. Furthermore, the fund has a Sharpe Ratio of 0.76 and a Beta of 1.08.
VXUS’s Mean Return is 0.58 points lower than that of XLI and its R-squared is 19.42 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than XLI. The Alpha and Beta of VXUS are 2.07 points lower and 0.09 points lower than XLI’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 2013 was the strongest year for XLI, returning 40.44% on an annual basis. The poorest year for XLI in the last ten years was 2018, with a yield of -13.1%. Most years the Industrial Select Sector SPDR Fund has given investors modest returns, such as in 2020, 2012, and 2016, when gains were 11.0%, 14.86%, and 19.93% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 XLI, the end total would have been $31,547. This equates to a $21,547 profit over 9 years and a compound annual growth rate (CAGR) of 14.44%.
VXUS’s CAGR is 6.04 percentage points lower than that of XLI and as a result, would have yielded $12,232 less on a $10,000 investment. Thus, VXUS performed worse than XLI by 6.04% annually.
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