ACWX vs. VT: A Comparative Assessment

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The Vanguard Total World Stock ETF (VT) and the iShares MSCI ACWI ex U.S. ETF (ACWX) both pursue broad international equity exposure, albeit through distinct methodologies. This assessment details a comparative analysis of associated costs, historical returns, risk profiles, and portfolio composition, intended to facilitate informed investment decisions.

Key Metrics: A Snapshot

Metric VT ACWX
Issuer Vanguard iShares
Expense Ratio 0.06% 0.32%
1-Year Return (as of Jan. 24, 2026) 19.76% 34.2%
Dividend Yield 1.77% 2.7%
Beta 0.92 0.74
AUM $62.50 billion $8.53 billion

The disparity in expense ratios is immediately apparent. While ACWX presents a potentially attractive dividend yield, the higher ongoing costs warrant careful consideration, particularly for long-term holdings. The substantial difference in Assets Under Management (AUM) also represents a factor, potentially impacting liquidity and trading efficiency.

Performance & Risk Parameters

Metric VT ACWX
Max Drawdown (5-Year) -26.38% -30.06%
Growth of $1,000 Over 5 Years $1,527 $1,267

Historical performance data reveals that VT has, over the preceding five-year period, demonstrated superior growth relative to ACWX. While both ETFs experienced comparable maximum drawdowns, suggesting similar volatility profiles, the magnitude of VT’s cumulative return is noteworthy.

Portfolio Composition: Underlying Holdings

ACWX, established approximately 18 years ago, tracks non-U.S. large- and mid-cap equities, encompassing a portfolio of 1,796 companies across both developed and emerging markets. Sector allocation is concentrated in financial services, industrials, and technology, with key holdings including Taiwan Semiconductor Manufacturing (2330.TW), Tencent Holdings Ltd (0700.HK), and ASML Holding N.V. (AMS:ASML).

VT, conversely, incorporates both U.S. and international equities, representing a broader universe of 10,036 holdings. Sector diversification mirrors that of ACWX, though with a more pronounced weighting towards U.S. companies, notably Nvidia (NVDA +1.53%), Apple (AAPL 0.07%), and Microsoft (MSFT +3.28%).

Implications for Investors

Over the long term, VT has demonstrably outperformed ACWX, yielding approximately 150% more since 2008. The significantly larger AUM of VT likely contributes to this differential, potentially offering increased trading efficiencies and liquidity. While ACWX exhibits a higher dividend yield, VT’s quarterly payout frequency may be preferable for certain investors.

However, ACWX’s focused international exposure could be advantageous for investors seeking to reduce domestic equity weighting. The fund’s top 10 holdings are geographically diverse, spanning Asia and Europe, whereas VT’s are predominantly U.S.-centric.

It is crucial to acknowledge that international equities can exhibit distinct performance characteristics compared to U.S. equities, potentially introducing elevated volatility. These securities are subject to idiosyncratic risks associated with specific countries’ economic and political environments.

Glossary

  • ETF (Exchange-Traded Fund): A pooled investment vehicle that trades on an exchange, tracking a specific index.
  • Expense Ratio: Annual fund operating costs, expressed as a percentage of average assets.
  • Dividend Yield: Annual dividends paid, divided by current market price.
  • Total Return: Overall investment gain, including price changes and dividends.
  • Beta: A measure of volatility relative to a benchmark index.
  • AUM (Assets Under Management): Total market value of assets managed.
  • Max Drawdown: Largest peak-to-trough decline in value.
  • Large-Cap Stocks: Shares of established, mature companies.
  • Mid-Cap Stocks: Shares of medium-sized companies.
  • Developed Markets: Countries with advanced economies.
  • Emerging Markets: Countries with developing economies.

For further guidance on ETF investing, please consult the referenced resources.

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2026-01-25 00:23