VSS vs. HSCZ

Last updated Jun 24, 2026

VSS (Vanguard FTSE All-World ex-US Small-Cap ETF) and HSCZ (iShares Currency Hedged MSCI EAFE Small Cap ETF) are both Foreign Small & Mid Cap Equities funds - VSS tracks the FTSE Global Small Cap ex US Index while HSCZ tracks the MSCI EAFE Small-Cap 100% Hedged to USD Index. Both are passively managed. Over the past 10 years, VSS returned 8.46%/yr vs 12.54%/yr for HSCZ. A 0.76 correlation means they provide meaningful diversification when combined. VSS charges 0.07%/yr vs 0.43%/yr for HSCZ.

Performance

VSS vs. HSCZ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) and iShares Currency Hedged MSCI EAFE Small Cap ETF (HSCZ). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VSS achieves a 7.79% return, which is significantly lower than HSCZ's 10.35% return. Over the past 10 years, VSS has underperformed HSCZ with an annualized return of 8.46%, while HSCZ has yielded a comparatively higher 12.54% annualized return.

VSS

• 1D: -2.68%
• 1M: -3.04%
• YTD: 7.79%
• 6M: 7.51%
• 1Y: 22.53%
• 3Y*: 16.03%
• 5Y*: 5.52%
• 10Y*: 8.46%

HSCZ

• 1D: -1.36%
• 1M: -0.07%
• YTD: 10.35%
• 6M: 10.73%
• 1Y: 27.70%
• 3Y*: 19.25%
• 5Y*: 11.06%
• 10Y*: 12.54%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VSS vs. HSCZ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	7.79%	29.61%	2.94%	15.52%	-21.48%	13.05%	11.81%	21.36%	-18.48%	30.61%
HSCZ iShares Currency Hedged MSCI EAFE Small Cap ETF	10.35%	25.74%	12.89%	17.03%	-11.46%	17.75%	6.40%	27.89%	-13.99%	24.52%

Correlation

The correlation between VSS and HSCZ is 0.81, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.81
Correlation (3Y) Calculated over the trailing 3-year period	0.80
Correlation (5Y) Calculated over the trailing 5-year period	0.84
Correlation (10Y) Calculated over the trailing 10-year period	0.80
Correlation (All Time) Calculated using the full available price history since Jul 14, 2015	0.76

The correlation between VSS and HSCZ has been stable across timeframes, ranging from 0.76 to 0.84 - a consistent structural relationship.

VSS vs. HSCZ - Sectors Allocation Comparison

Sectors	VSS	HSCZ
Industrials	18.7%	22.8%
Technology	14.5%	11.5%
Basic Materials	12.2%	10.3%
Financial Services	10.1%	15.8%
Consumer Cyclical	9.1%	9.9%
Real Estate	7.1%	10.4%
Healthcare	6.0%	3.7%
Energy	4.4%	4.2%
Consumer Defensive	3.5%	3.1%
Utilities	2.5%	2.2%
Communication Services	2.3%	3.1%

Return for Risk

VSS vs. HSCZ — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VSS

VSS Risk / Return Rank: 42
VSS Sharpe Ratio Rank: 42
VSS Sortino Ratio Rank: 40
VSS Omega Ratio Rank: 43
VSS Calmar Ratio Rank: 40
VSS Martin Ratio Rank: 45

HSCZ

HSCZ Risk / Return Rank: 75
HSCZ Sharpe Ratio Rank: 80
HSCZ Sortino Ratio Rank: 81
HSCZ Omega Ratio Rank: 80
HSCZ Calmar Ratio Rank: 62
HSCZ Martin Ratio Rank: 71

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VSS vs. HSCZ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) and iShares Currency Hedged MSCI EAFE Small Cap ETF (HSCZ). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VSS	HSCZ	Difference
Sharpe ratio: Return per unit of total volatility	1.43	2.39	-0.96
Sortino ratio: Return per unit of downside risk	1.98	3.35	-1.36
Omega ratio: Gain probability vs. loss probability	1.27	1.44	-0.17
Calmar ratio: Return relative to maximum drawdown	1.95	2.90	-0.95
Martin ratio: Return relative to average drawdown	7.24	12.32	-5.08

VSS vs. HSCZ - Sharpe Ratio Comparison

The current VSS Sharpe Ratio is 1.43, which is lower than the HSCZ Sharpe Ratio of 2.39. The chart below compares the historical Sharpe Ratios of VSS and HSCZ, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VSS vs. HSCZ - Drawdown Comparison

The maximum VSS drawdown since its inception was -43.51%, which is greater than HSCZ's maximum drawdown of -34.89%. Use the drawdown chart below to compare losses from any high point for VSS and HSCZ.

Drawdown Indicators

	VSS	HSCZ	Difference
Max Drawdown Largest peak-to-trough decline	-43.51%	-34.89%	-8.62%
Max Drawdown (1Y) Largest decline over 1 year	-11.62%	-9.61%	-2.01%
Max Drawdown (3Y) Largest decline over 3 years	-15.73%	-12.81%	-2.92%
Max Drawdown (5Y) Largest decline over 5 years	-33.93%	-20.11%	-13.82%
Max Drawdown (10Y) Largest decline over 10 years	-43.51%	-34.89%	-8.62%
Current Drawdown Current decline from peak	-5.03%	-1.36%	-3.67%
Average Drawdown Average peak-to-trough decline	-9.62%	-4.64%	-4.98%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.12%	2.25%	+0.87%

Volatility

VSS vs. HSCZ - Volatility Comparison

Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) has a higher volatility of 6.54% compared to iShares Currency Hedged MSCI EAFE Small Cap ETF (HSCZ) at 3.94%. This indicates that VSS's price experiences larger fluctuations and is considered to be riskier than HSCZ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VSS	HSCZ	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.54%	3.94%	+2.60%
Volatility (6M) Calculated over the trailing 6-month period	13.88%	9.76%	+4.12%
Volatility (1Y) Calculated over the trailing 1-year period	15.81%	11.64%	+4.17%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.63%	13.52%	+3.11%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.17%	15.47%	+1.70%

VSS vs. HSCZ - Expense Ratio Comparison

VSS has a 0.07% expense ratio, which is lower than HSCZ's 0.43% expense ratio.

Dividends

VSS vs. HSCZ - Dividend Comparison

VSS's dividend yield for the trailing twelve months is around 3.24%, more than HSCZ's 2.95% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
HSCZ iShares Currency Hedged MSCI EAFE Small Cap ETF	2.95%	3.25%	3.26%	2.98%	26.91%	2.90%	1.46%	4.66%	6.15%	2.52%	2.57%	1.75%
VSS Vanguard FTSE All-World ex-US Small-Cap ETF	3.24%	3.39%	3.44%	3.14%	2.30%	2.74%	1.90%	3.25%	2.80%	2.83%	2.93%	2.66%

Frequently Asked Questions

Can I hold both VSS and HSCZ in my portfolio?

VSS and HSCZ have a correlation of 0.81, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VSS or HSCZ?

VSS has higher volatility (6.54%) compared to HSCZ (3.94%). In terms of maximum drawdown, VSS dropped -43.51% vs HSCZ's -34.89%.

Which ETF is better, VSS or HSCZ?

On 10-year performance, HSCZ leads with 12.54% vs 8.46% for VSS. On fees, VSS is cheaper at 0.07% per year. On volatility, HSCZ has been the lower-risk option at 3.94%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VSS or HSCZ?

Over the 10-year period, HSCZ has performed better with a 12.54% return vs 8.46%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VSS or HSCZ?

VSS is cheaper with a 0.07% expense ratio, compared with 0.43% for HSCZ.

Which ETF pays a higher dividend yield, VSS or HSCZ?

VSS has the higher dividend yield at 3.24%, compared with 2.95% for HSCZ.

What is the main difference between VSS and HSCZ?

VSS tracks FTSE Global Small Cap ex US Index, while HSCZ tracks MSCI EAFE Small-Cap 100% Hedged to USD Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.07% for VSS and 0.43% for HSCZ.

Which has better risk-adjusted returns?

HSCZ currently has the higher Sharpe Ratio (2.39 vs 1.43), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.