The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between ITOT and IWN? And which fund is better?
The expense ratio of ITOT is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than IWN over the past ten years.
In this article, we’ll compare ITOT vs. IWN. We’ll look at industry exposure and risk metrics, as well as at their annual returns and holdings. Moreover, I’ll also discuss ITOT’s and IWN’s performance, fund composition, and portfolio growth and examine how these affect their overall returns.
Summary
| ITOT | IWN | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares Russell 2000 Value ETF |
| Category | Large Blend | Small Value |
| Issuer | iShares | iShares |
| AUM | 41.97B | 15.48B |
| Avg. Return | 14.59% | 10.96% |
| Div. Yield | 1.2% | 1.26% |
| Expense Ratio | 0.03% | 0.24% |
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 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.
ITOT’s dividend yield is 0.06% lower than that of IWN (1.2% vs. 1.26%). Also, ITOT yielded on average 3.63% more per year over the past decade (14.59% vs. 10.96%). The expense ratio of ITOT is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%).
Fund Composition
Industry Exposure
| ITOT | IWN | |
| Technology | 24.49% | 6.02% |
| Industrials | 9.21% | 14.58% |
| Energy | 2.51% | 5.84% |
| Communication Services | 10.54% | 4.17% |
| Utilities | 2.35% | 4.69% |
| Healthcare | 13.59% | 10.94% |
| Consumer Defensive | 5.79% | 3.77% |
| Real Estate | 3.67% | 14.36% |
| Financial Services | 13.69% | 22.97% |
| Consumer Cyclical | 11.69% | 8.39% |
| Basic Materials | 2.47% | 4.29% |
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 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.
IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.
ITOT is 18.47% more exposed to the Technology sector than IWN (24.49% vs 6.02%). ITOT’s exposure to Financial Services and Healthcare stocks is 9.28% lower and 2.65% higher respectively (13.69% vs. 22.97% and 13.59% vs. 10.94%). In total, Basic Materials, Energy, and Real Estate also make up 15.84% less of the fund’s holdings compared to IWN (8.65% vs. 24.49%).
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
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%.
| IWN Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 1.06% |
| Tenet Healthcare Corp | 0.47% |
| Stag Industrial Inc | 0.47% |
| Ovintiv Inc | 0.45% |
| EMCOR Group Inc | 0.42% |
| Valley National Bancorp | 0.37% |
| Chesapeake Energy Corp Ordinary Shares – New | 0.37% |
| Agree Realty Corp | 0.36% |
| Macy’s Inc | 0.35% |
| Essent Group Ltd | 0.35% |
IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.
Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.
Risk Analysis
| ITOT | IWN | |
| Mean Return | 1.27 | 1.01 |
| R-squared | 99.4 | 72.64 |
| Std. Deviation | 14.02 | 19.28 |
| Alpha | -0.54 | -6.32 |
| Beta | 1.03 | 1.21 |
| Sharpe Ratio | 1.04 | 0.59 |
| Treynor Ratio | 14.13 | 8.3 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Standard Deviation of 14.02 with a Treynor Ratio of 14.13 and a Mean Return of 1.27. Its Beta is 1.03 while ITOT’s Alpha is -0.54. Furthermore, the fund has a Sharpe Ratio of 1.04 and a R-squared of 99.4.
The iShares Russell 2000 Value ETF (IWN) has a Sharpe Ratio of 0.59 with a Beta of 1.21 and a Treynor Ratio of 8.3. Its Standard Deviation is 19.28 while IWN’s R-squared is 72.64. Furthermore, the fund has a Mean Return of 1.01 and a Alpha of -6.32.
ITOT’s Mean Return is 0.26 points higher than that of IWN and its R-squared is 26.76 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than IWN. The Alpha and Beta of ITOT are 5.78 points higher and 0.18 points lower than IWN’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | IWN |
| 2020 | 20.75% | 4.5% |
| 2019 | 30.87% | 22.17% |
| 2018 | -5.27% | -12.94% |
| 2017 | 21.23% | 7.73% |
| 2016 | 12.59% | 31.64% |
| 2015 | 0.96% | -7.53% |
| 2014 | 13.01% | 4.13% |
| 2013 | 32.67% | 34.3% |
| 2012 | 15.98% | 17.92% |
| 2011 | 1.55% | -5.64% |
| 2010 | 16.15% | 24.29% |
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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| IWN | $10,000 | $28,189 | 10.96% |
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 IWN, the end total would have been $28,189. This equates to a $18,189 profit over 11 years and a compound annual growth rate (CAGR) of 10.96%.
ITOT’s CAGR is 3.63 percentage points higher than that of IWN and as a result, would have yielded $14,121 more on a $10,000 investment. Thus, ITOT outperformed IWN by 3.63% annually.
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