VYM vs. IXUS: What’s The Difference?

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

The expense ratio of VYM is 0.03 percentage points lower than IXUS’s (0.06% vs. 0.09%). VYM also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VYM has provided higher returns than IXUS over the past ten years.

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

Summary

VYM IXUS
Name Vanguard High Dividend Yield Index Fund ETF Shares iShares Core MSCI Total International Stock ETF
Category Large Value Foreign Large Blend
Issuer Vanguard iShares
AUM 48.5B 29.54B
Avg. Return 12.20% 6.09%
Div. Yield 2.79% 2.13%
Expense Ratio 0.06% 0.09%

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%.

The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.

VYM’s dividend yield is 0.66% higher than that of IXUS (2.79% vs. 2.13%). Also, VYM yielded on average 6.11% more per year over the past decade (12.20% vs. 6.09%). The expense ratio of VYM is 0.03 percentage points lower than IXUS’s (0.06% vs. 0.09%).

Fund Composition

Industry Exposure

VYM vs. IXUS - Industry Exposure

VYM IXUS
Technology 9.77% 13.24%
Industrials 10.14% 12.78%
Energy 7.12% 4.39%
Communication Services 5.91% 7.09%
Utilities 7.27% 2.95%
Healthcare 13.61% 9.29%
Consumer Defensive 14.13% 8.19%
Real Estate 0.02% 3.66%
Financial Services 22.05% 17.34%
Consumer Cyclical 5.57% 12.57%
Basic Materials 4.41% 8.5%

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%.

The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.

IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.

VYM is 4.71% more exposed to the Financial Services sector than IXUS (22.05% vs 17.34%). VYM’s exposure to Consumer Defensive and Healthcare stocks is 5.94% higher and 4.32% higher respectively (14.13% vs. 8.19% and 13.61% vs. 9.29%). In total, Basic Materials, Consumer Cyclical, and Communication Services also make up 12.27% less of the fund’s holdings compared to IXUS (15.89% vs. 28.16%).

Holdings

VYM - Holdings

VYM Holdings Weight
JPMorgan Chase & Co 3.53%
Johnson & Johnson 3.28%
The Home Depot Inc 2.59%
Procter & Gamble Co 2.48%
Bank of America Corp 2.35%
Exxon Mobil Corp 2.02%
Comcast Corp Class A 1.96%
Verizon Communications Inc 1.75%
Intel Corp 1.71%
Cisco Systems Inc 1.69%

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%.

IXUS - Holdings

IXUS Holdings Weight
Taiwan Semiconductor Manufacturing Co Ltd 1.64%
Tencent Holdings Ltd 1.35%
Alibaba Group Holding Ltd Ordinary Shares 1.34%
Nestle SA 1.1%
Samsung Electronics Co Ltd 1.06%
ASML Holding NV 0.9%
Roche Holding AG 0.81%
LVMH Moet Hennessy Louis Vuitton SE 0.67%
Novartis AG 0.62%
Toyota Motor Corp 0.59%

IXUS’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 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.

ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.

Risk Analysis

VYM IXUS
Mean Return 1.04 0
R-squared 88.88 0
Std. Deviation 12.69 0
Alpha -0.7 0
Beta 0.88 0
Sharpe Ratio 0.93 0
Treynor Ratio 13.24 0

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

The iShares Core MSCI Total International Stock ETF (IXUS) has a Beta of 0 with a R-squared of 0 and a Mean Return of 0. Its Alpha is 0 while IXUS’s Sharpe Ratio is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Standard Deviation of 0.

VYM’s Mean Return is 1.04 points higher than that of IXUS and its R-squared is 88.88 points higher. With a Standard Deviation of 12.69, VYM is slightly more volatile than IXUS. The Alpha and Beta of VYM are 0.70 points lower and 0.88 points higher than IXUS’s Alpha and Beta.

Performance

Annual Returns

VYM vs. IXUS - Annual Returns

Year VYM IXUS
2020 1.14% 11.14%
2019 24.2% 21.85%
2018 -5.87% -14.55%
2017 16.42% 28.08%
2016 16.87% 4.66%
2015 0.33% -4.62%
2014 13.47% -3.96%
2013 30.26% 15.85%
2012 12.68% 0.0%
2011 10.5% 0.0%
2010 14.17% 0.0%

VYM had its best year in 2013 with an annual return of 30.26%. VYM’s worst year over the past decade yielded -5.87% and occurred in 2018. In most years the Vanguard High Dividend Yield Index Fund ETF Shares provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 12.68%, 13.47%, and 14.17% respectively.

The year 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.

Portfolio Growth

VYM vs. IXUS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VYM $10,000 $18,315 12.20%
IXUS $10,000 $14,209 6.09%

A $10,000 investment in VYM would have resulted in a final balance of $18,315. This is a profit of $8,315 over 7 years and amounts to a compound annual growth rate (CAGR) of 12.20%.

With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.

VYM’s CAGR is 6.11 percentage points higher than that of IXUS and as a result, would have yielded $4,106 more on a $10,000 investment. Thus, VYM outperformed IXUS by 6.11% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply