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ITOT vs. IWR: What’s The Difference?

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

The expense ratio of ITOT is 0.16 percentage points lower than IWR’s (0.03% vs. 0.19%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than IWR over the past ten years.

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

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Summary

ITOTIWR
NameiShares Core S&P Total U.S. Stock Market ETFiShares Russell Mid-Cap ETF
CategoryLarge BlendMid-Cap Blend
IssueriSharesiShares
AUM41.97B29.84B
Avg. Return14.59%14.15%
Div. Yield1.2%0.99%
Expense Ratio0.03%0.19%

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 Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

ITOT’s dividend yield is 0.21% higher than that of IWR (1.2% vs. 0.99%). Also, ITOT yielded on average 0.44% more per year over the past decade (14.59% vs. 14.15%). The expense ratio of ITOT is 0.16 percentage points lower than IWR’s (0.03% vs. 0.19%).

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Fund Composition

Industry Exposure

ITOT vs. IWR - Industry Exposure

ITOTIWR
Technology24.49%19.67%
Industrials9.21%14.54%
Energy2.51%3.48%
Communication Services10.54%4.64%
Utilities2.35%4.46%
Healthcare13.59%11.76%
Consumer Defensive5.79%3.82%
Real Estate3.67%8.31%
Financial Services13.69%11.64%
Consumer Cyclical11.69%13.59%
Basic Materials2.47%4.1%

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 Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

ITOT is 4.82% more exposed to the Technology sector than IWR (24.49% vs 19.67%). ITOT’s exposure to Financial Services and Healthcare stocks is 2.05% higher and 1.83% higher respectively (13.69% vs. 11.64% and 13.59% vs. 11.76%). In total, Basic Materials, Energy, and Real Estate also make up 7.24% less of the fund’s holdings compared to IWR (8.65% vs. 15.89%).

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%.

IWR - Holdings

IWR HoldingsWeight
IDEXX Laboratories Inc0.51%
DocuSign Inc0.51%
Twitter Inc0.48%
Chipotle Mexican Grill Inc0.47%
Roku Inc Class A0.44%
Marvell Technology Inc0.44%
DexCom Inc0.44%
Trane Technologies PLC0.43%
MSCI Inc0.43%
Carrier Global Corp Ordinary Shares0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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Risk Analysis

ITOTIWR
Mean Return1.271.17
R-squared99.491.52
Std. Deviation14.0215.66
Alpha-0.54-2.8
Beta1.031.11
Sharpe Ratio1.040.86
Treynor Ratio14.1311.72

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

The iShares Russell Mid-Cap ETF (IWR) has a Alpha of -2.8 with a Standard Deviation of 15.66 and a R-squared of 91.52. Its Mean Return is 1.17 while IWR’s Sharpe Ratio is 0.86. Furthermore, the fund has a Beta of 1.11 and a Treynor Ratio of 11.72.

ITOT’s Mean Return is 0.10 points higher than that of IWR and its R-squared is 7.88 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than IWR. The Alpha and Beta of ITOT are 2.26 points higher and 0.08 points lower than IWR’s Alpha and Beta.

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Performance

Annual Returns

ITOT vs. IWR - Annual Returns

YearITOTIWR
202020.75%16.91%
201930.87%30.31%
2018-5.27%-9.13%
201721.23%18.32%
201612.59%13.58%
20150.96%-2.57%
201413.01%13.03%
201332.67%34.5%
201215.98%17.13%
20111.55%-1.67%
201016.15%25.25%

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 IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% respectively.

Portfolio Growth

ITOT vs. IWR - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$42,31014.59%
IWR$10,000$39,75114.15%

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 IWR, the end total would have been $39,751. This equates to a $29,751 profit over 11 years and a compound annual growth rate (CAGR) of 14.15%.

ITOT’s CAGR is 0.44 percentage points higher than that of IWR and as a result, would have yielded $2,559 more on a $10,000 investment. Thus, ITOT outperformed IWR by 0.44% annually.


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