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.
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Summary
| ITOT | IWS | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares Russell Mid-Cap Value ETF |
| Category | Large Blend | Mid-Cap Value |
| Issuer | iShares | iShares |
| AUM | 41.97B | 14.24B |
| Avg. Return | 14.59% | 12.35% |
| Div. Yield | 1.2% | 1.34% |
| Expense Ratio | 0.03% | 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%).
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Fund Composition
Industry Exposure
| ITOT | IWS | |
| Technology | 24.49% | 11.39% |
| Industrials | 9.21% | 14.6% |
| Energy | 2.51% | 4.71% |
| Communication Services | 10.54% | 4.08% |
| Utilities | 2.35% | 6.97% |
| Healthcare | 13.59% | 8.56% |
| Consumer Defensive | 5.79% | 4.76% |
| Real Estate | 3.67% | 11.71% |
| Financial Services | 13.69% | 15.75% |
| Consumer Cyclical | 11.69% | 12.07% |
| Basic Materials | 2.47% | 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 | 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%.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
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%.
Risk Analysis
| ITOT | IWS | |
| Mean Return | 1.27 | 1.06 |
| R-squared | 99.4 | 87.04 |
| Std. Deviation | 14.02 | 16.03 |
| Alpha | -0.54 | -4.11 |
| Beta | 1.03 | 1.1 |
| Sharpe Ratio | 1.04 | 0.75 |
| Treynor Ratio | 14.13 | 10.3 |
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.
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Performance
Annual Returns
| Year | ITOT | IWS |
| 2020 | 20.75% | 4.76% |
| 2019 | 30.87% | 26.78% |
| 2018 | -5.27% | -12.36% |
| 2017 | 21.23% | 13.1% |
| 2016 | 12.59% | 19.69% |
| 2015 | 0.96% | -4.93% |
| 2014 | 13.01% | 14.49% |
| 2013 | 32.67% | 33.11% |
| 2012 | 15.98% | 18.27% |
| 2011 | 1.55% | -1.55% |
| 2010 | 16.15% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| IWS | $10,000 | $33,083 | 12.35% |
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.
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