VTWIX vs. VFORX

Last updated Jun 4, 2026

VTWIX (Vanguard Total World Stock Index Fund Institutional Shares) and VFORX (Vanguard Target Retirement 2040 Fund) are both mutual funds - VTWIX is a Large Cap Growth Equities fund managed by Vanguard, while VFORX is a Target Retirement Date fund managed by Vanguard. Over the past 10 years, VTWIX returned 12.83%/yr vs 10.66%/yr for VFORX. With a 0.99 correlation, they move nearly in lockstep. Both charge a 0.08% expense ratio.

Performance

VTWIX vs. VFORX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Total World Stock Index Fund Institutional Shares (VTWIX) and Vanguard Target Retirement 2040 Fund (VFORX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VTWIX achieves a 13.18% return, which is significantly higher than VFORX's 10.11% return. Over the past 10 years, VTWIX has outperformed VFORX with an annualized return of 12.83%, while VFORX has yielded a comparatively lower 10.66% annualized return.

VTWIX

• 1D: 0.37%
• 1M: 5.70%
• YTD: 13.18%
• 6M: 14.11%
• 1Y: 30.33%
• 3Y*: 21.30%
• 5Y*: 11.37%
• 10Y*: 12.83%

VFORX

• 1D: 0.31%
• 1M: 4.40%
• YTD: 10.11%
• 6M: 10.85%
• 1Y: 23.95%
• 3Y*: 17.28%
• 5Y*: 8.86%
• 10Y*: 10.66%

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

VTWIX vs. VFORX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VTWIX Vanguard Total World Stock Index Fund Institutional Shares	13.18%	22.43%	16.47%	21.87%	-18.00%	18.21%	16.70%	26.77%	-9.68%	24.21%
VFORX Vanguard Target Retirement 2040 Fund	10.11%	18.77%	12.90%	18.56%	-17.00%	14.55%	15.48%	23.86%	-7.32%	18.45%

Correlation

The correlation between VTWIX and VFORX is 1.00 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	1.00
Correlation (3Y) Calculated over the trailing 3-year period	0.99
Correlation (5Y) Calculated over the trailing 5-year period	0.99
Correlation (10Y) Calculated over the trailing 10-year period	0.99
Correlation (All Time) Calculated using the full available price history since Jun 30, 2008	0.99

The correlation between VTWIX and VFORX has been stable across timeframes, ranging from 0.99 to 1.00 - a consistent structural relationship.

VTWIX vs. VFORX - Sectors Allocation Comparison

Sectors	VTWIX	VFORX
Technology	27.8%	27.4%
Financial Services	15.9%	16.1%
Industrials	12.0%	12.3%
Consumer Cyclical	9.5%	9.4%
Communication Services	8.3%	8.0%
Healthcare	8.1%	8.3%
Consumer Defensive	4.8%	4.8%
Energy	4.3%	4.3%
Basic Materials	4.2%	4.3%
Utilities	2.7%	2.7%
Real Estate	2.4%	2.5%

Return for Risk

VTWIX vs. VFORX — Risk / Return Rank

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

VTWIX

VTWIX Risk / Return Rank: 70
VTWIX Sharpe Ratio Rank: 74
VTWIX Sortino Ratio Rank: 67
VTWIX Omega Ratio Rank: 66
VTWIX Calmar Ratio Rank: 69
VTWIX Martin Ratio Rank: 76

VFORX

VFORX Risk / Return Rank: 71
VFORX Sharpe Ratio Rank: 74
VFORX Sortino Ratio Rank: 71
VFORX Omega Ratio Rank: 69
VFORX Calmar Ratio Rank: 67
VFORX Martin Ratio Rank: 73

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.

VTWIX vs. VFORX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Total World Stock Index Fund Institutional Shares (VTWIX) and Vanguard Target Retirement 2040 Fund (VFORX). 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.

	VTWIX	VFORX	Difference
Sharpe ratio: Return per unit of total volatility	2.49	2.50	-0.01
Sortino ratio: Return per unit of downside risk	3.41	3.50	-0.09
Omega ratio: Gain probability vs. loss probability	1.45	1.46	-0.01
Calmar ratio: Return relative to maximum drawdown	3.19	3.15	+0.04
Martin ratio: Return relative to average drawdown	14.27	13.90	+0.38
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VTWIX vs. VFORX - Sharpe Ratio Comparison

The current VTWIX Sharpe Ratio is 2.49, which is comparable to the VFORX Sharpe Ratio of 2.50. The chart below compares the historical Sharpe Ratios of VTWIX and VFORX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VTWIX	VFORX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.49	2.50	-0.01
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.73	0.72	+0.01
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.77	0.78	-0.01
Sharpe Ratio (All Time) Calculated using the full available price history	0.46	0.50	-0.04

Drawdowns

VTWIX vs. VFORX - Drawdown Comparison

The maximum VTWIX drawdown since its inception was -50.16%, roughly equal to the maximum VFORX drawdown of -51.63%. Use the drawdown chart below to compare losses from any high point for VTWIX and VFORX.

Drawdown Indicators

	VTWIX	VFORX	Difference
Max Drawdown Largest peak-to-trough decline	-50.16%	-51.63%	+1.47%
Max Drawdown (1Y) Largest decline over 1 year	-9.64%	-7.70%	-1.94%
Max Drawdown (3Y) Largest decline over 3 years	-16.43%	-12.12%	-4.31%
Max Drawdown (5Y) Largest decline over 5 years	-26.39%	-24.32%	-2.07%
Max Drawdown (10Y) Largest decline over 10 years	-34.20%	-29.35%	-4.85%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-6.97%	-6.77%	-0.20%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.15%	1.74%	+0.41%

Volatility

VTWIX vs. VFORX - Volatility Comparison

Vanguard Total World Stock Index Fund Institutional Shares (VTWIX) has a higher volatility of 3.55% compared to Vanguard Target Retirement 2040 Fund (VFORX) at 2.99%. This indicates that VTWIX's price experiences larger fluctuations and is considered to be riskier than VFORX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTWIX	VFORX	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.55%	2.99%	+0.56%
Volatility (6M) Calculated over the trailing 6-month period	9.81%	7.78%	+2.03%
Volatility (1Y) Calculated over the trailing 1-year period	12.36%	9.71%	+2.65%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.72%	12.43%	+3.29%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.76%	13.68%	+3.08%

VTWIX vs. VFORX - Expense Ratio Comparison

Both VTWIX and VFORX have an expense ratio of 0.08%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

VTWIX vs. VFORX - Dividend Comparison

VTWIX's dividend yield for the trailing twelve months is around 1.57%, less than VFORX's 2.51% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VFORX Vanguard Target Retirement 2040 Fund	2.51%	2.77%	2.86%	2.38%	2.60%	20.68%	2.06%	2.28%	2.58%	0.04%	2.40%	2.99%
VTWIX Vanguard Total World Stock Index Fund Institutional Shares	1.57%	1.82%	1.94%	2.07%	2.19%	1.81%	1.66%	2.32%	2.55%	2.11%	2.40%	2.46%

Frequently Asked Questions

Can I hold both VTWIX and VFORX in my portfolio?

With a correlation of 1.00, VTWIX and VFORX move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VTWIX or VFORX?

VTWIX has higher volatility (3.55%) compared to VFORX (2.99%). In terms of maximum drawdown, VTWIX dropped -50.16% vs VFORX's -51.63%.

Which has better risk-adjusted returns?

VFORX currently has the higher Sharpe Ratio (2.50 vs 2.49), 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.