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ITOT vs. IWB: What’s The Difference?

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares Russell 1000 ETF (IWB) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and IWB is a iShares Large Blend fund. So, what’s the difference between ITOT and IWB? And which fund is better?

The expense ratio of ITOT is 0.12 percentage points lower than IWB’s (0.03% vs. 0.15%). ITOT also has a lower exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided lower returns than IWB over the past ten years.

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

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Summary

ITOTIWB
NameiShares Core S&P Total U.S. Stock Market ETFiShares Russell 1000 ETF
CategoryLarge BlendLarge Blend
IssueriSharesiShares
AUM41.97B30.54B
Avg. Return14.59%14.64%
Div. Yield1.2%1.14%
Expense Ratio0.03%0.15%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.

The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

ITOT’s dividend yield is 0.06% higher than that of IWB (1.2% vs. 1.14%). Also, ITOT yielded on average 0.05% less per year over the past decade (14.59% vs. 14.64%). The expense ratio of ITOT is 0.12 percentage points lower than IWB’s (0.03% vs. 0.15%).

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Fund Composition

Industry Exposure

ITOT vs. IWB - Industry Exposure

ITOTIWB
Technology24.49%25.33%
Industrials9.21%8.88%
Energy2.51%2.44%
Communication Services10.54%10.83%
Utilities2.35%2.36%
Healthcare13.59%13.35%
Consumer Defensive5.79%5.97%
Real Estate3.67%3.34%
Financial Services13.69%13.64%
Consumer Cyclical11.69%11.85%
Basic Materials2.47%2.02%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.

ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.

The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

ITOT is 0.84% less exposed to the Technology sector than IWB (24.49% vs 25.33%). ITOT’s exposure to Financial Services and Healthcare stocks is 0.05% higher and 0.24% higher respectively (13.69% vs. 13.64% and 13.59% vs. 13.35%). In total, Basic Materials, Energy, and Real Estate also make up 0.85% more of the fund’s holdings compared to IWB (8.65% vs. 7.80%).

Holdings

ITOT - Holdings

ITOT HoldingsWeight
Apple Inc5.07%
Microsoft Corp4.75%
Amazon.com Inc3.16%
Facebook Inc Class A1.89%
Alphabet Inc Class A1.79%
Alphabet Inc Class C1.71%
Tesla Inc1.17%
Berkshire Hathaway Inc Class B1.17%
NVIDIA Corp1.08%
JPMorgan Chase & Co1.02%

ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.

Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.

IWB - Holdings

IWB HoldingsWeight
Apple Inc5.45%
Microsoft Corp5.11%
Amazon.com Inc3.43%
Facebook Inc Class A2.03%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.82%
Tesla Inc1.27%
Berkshire Hathaway Inc Class B1.24%
NVIDIA Corp1.11%
JPMorgan Chase & Co1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

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Risk Analysis

ITOTIWB
Mean Return1.271.27
R-squared99.499.73
Std. Deviation14.0213.87
Alpha-0.54-0.38
Beta1.031.02
Sharpe Ratio1.041.05
Treynor Ratio14.1314.31

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Sharpe Ratio of 1.04 with a Treynor Ratio of 14.13 and a R-squared of 99.4. Its Alpha is -0.54 while ITOT’s Standard Deviation is 14.02. Furthermore, the fund has a Beta of 1.03 and a Mean Return of 1.27.

The iShares Russell 1000 ETF (IWB) has a Standard Deviation of 13.87 with a Mean Return of 1.27 and a Sharpe Ratio of 1.05. Its R-squared is 99.73 while IWB’s Beta is 1.02. Furthermore, the fund has a Alpha of -0.38 and a Treynor Ratio of 14.31.

ITOT’s Mean Return is 0.00 points lower than that of IWB and its R-squared is 0.33 points lower. With a Standard Deviation of 14.02, ITOT is slightly more volatile than IWB. The Alpha and Beta of ITOT are 0.16 points lower and 0.01 points higher than IWB’s Alpha and Beta.

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Performance

Annual Returns

ITOT vs. IWB - Annual Returns

YearITOTIWB
202020.75%20.8%
201930.87%31.26%
2018-5.27%-4.91%
201721.23%21.53%
201612.59%11.91%
20150.96%0.82%
201413.01%13.08%
201332.67%32.93%
201215.98%16.27%
20111.55%1.36%
201016.15%15.94%

ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% respectively.

The year 2013 was the strongest year for IWB, returning 32.93% on an annual basis. The poorest year for IWB in the last ten years was 2018, with a yield of -4.91%. Most years the iShares Russell 1000 ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.08%, 15.94%, and 16.27% respectively.

Portfolio Growth

ITOT vs. IWB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$42,31014.59%
IWB$10,000$42,46214.64%

A $10,000 investment in ITOT would have resulted in a final balance of $42,310. This is a profit of $32,310 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.59%.

With a $10,000 investment in IWB, the end total would have been $42,462. This equates to a $32,462 profit over 11 years and a compound annual growth rate (CAGR) of 14.64%.

ITOT’s CAGR is 0.05 percentage points lower than that of IWB and as a result, would have yielded $152 less on a $10,000 investment. Thus, ITOT performed worse than IWB by 0.05% annually.


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