Skip to content

ITOT vs. IWS: What’s The Difference?

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

The expense ratio of ITOT is 0.20 percentage points lower than IWS’s (0.03% vs. 0.23%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than IWS over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

ITOTIWS
NameiShares Core S&P Total U.S. Stock Market ETFiShares Russell Mid-Cap Value ETF
CategoryLarge BlendMid-Cap Value
IssueriSharesiShares
AUM41.97B14.24B
Avg. Return14.59%12.35%
Div. Yield1.2%1.34%
Expense Ratio0.03%0.23%

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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

ITOT’s dividend yield is 0.14% lower than that of IWS (1.2% vs. 1.34%). Also, ITOT yielded on average 2.24% more per year over the past decade (14.59% vs. 12.35%). The expense ratio of ITOT is 0.20 percentage points lower than IWS’s (0.03% vs. 0.23%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

ITOT vs. IWS - Industry Exposure

ITOTIWS
Technology24.49%11.39%
Industrials9.21%14.6%
Energy2.51%4.71%
Communication Services10.54%4.08%
Utilities2.35%6.97%
Healthcare13.59%8.56%
Consumer Defensive5.79%4.76%
Real Estate3.67%11.71%
Financial Services13.69%15.75%
Consumer Cyclical11.69%12.07%
Basic Materials2.47%5.4%

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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

ITOT is 13.10% more exposed to the Technology sector than IWS (24.49% vs 11.39%). ITOT’s exposure to Financial Services and Healthcare stocks is 2.06% lower and 5.03% higher respectively (13.69% vs. 15.75% and 13.59% vs. 8.56%). In total, Basic Materials, Energy, and Real Estate also make up 13.17% less of the fund’s holdings compared to IWS (8.65% vs. 21.82%).

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%.

IWS - Holdings

IWS HoldingsWeight
Twitter Inc0.69%
Marvell Technology Inc0.69%
IHS Markit Ltd0.62%
Prudential Financial Inc0.56%
Otis Worldwide Corp Ordinary Shares0.54%
International Flavors & Fragrances Inc0.53%
Xcel Energy Inc0.52%
Motorola Solutions Inc0.52%
Aptiv PLC0.52%
Aflac Inc0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

ITOTIWS
Mean Return1.271.06
R-squared99.487.04
Std. Deviation14.0216.03
Alpha-0.54-4.11
Beta1.031.1
Sharpe Ratio1.040.75
Treynor Ratio14.1310.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a Alpha of -4.11 with a Treynor Ratio of 10.3 and a R-squared of 87.04. Its Beta is 1.1 while IWS’s Mean Return is 1.06. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Standard Deviation of 16.03.

ITOT’s Mean Return is 0.21 points higher than that of IWS and its R-squared is 12.36 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than IWS. The Alpha and Beta of ITOT are 3.57 points higher and 0.07 points lower than IWS’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

ITOT vs. IWS - Annual Returns

YearITOTIWS
202020.75%4.76%
201930.87%26.78%
2018-5.27%-12.36%
201721.23%13.1%
201612.59%19.69%
20150.96%-4.93%
201413.01%14.49%
201332.67%33.11%
201215.98%18.27%
20111.55%-1.55%
201016.15%24.46%

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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

ITOT vs. IWS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$42,31014.59%
IWS$10,000$33,08312.35%

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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

ITOT’s CAGR is 2.24 percentage points higher than that of IWS and as a result, would have yielded $9,227 more on a $10,000 investment. Thus, ITOT outperformed IWS by 2.24% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.