IVW vs. DFAC: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between IVW and DFAC? And which fund is better?

The expense ratio of IVW is 0.01 percentage points lower than DFAC’s (0.18% vs. 0.19%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than DFAC over the past ten years.

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

Summary

IVW DFAC
Name iShares S&P 500 Growth ETF Dimensional U.S. Core Equity 2 ETF
Category Large Growth Large Blend
Issuer iShares Dimensional Fund Advisors
AUM 35.72B 13.53B
Avg. Return 16.74% 13.93%
Div. Yield 0.61% 1.0%
Expense Ratio 0.18% 0.19%

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.

IVW’s dividend yield is 0.39% lower than that of DFAC (0.61% vs. 1.0%). Also, IVW yielded on average 2.80% more per year over the past decade (16.74% vs. 13.93%). The expense ratio of IVW is 0.01 percentage points lower than DFAC’s (0.18% vs. 0.19%).

Fund Composition

Industry Exposure

IVW vs. DFAC - Industry Exposure

IVW DFAC
Technology 37.8% 22.81%
Industrials 5.72% 14.13%
Energy 0.06% 2.67%
Communication Services 15.44% 7.63%
Utilities 0.47% 1.54%
Healthcare 11.88% 12.09%
Consumer Defensive 3.84% 5.94%
Real Estate 1.11% 0.37%
Financial Services 6.78% 16.17%
Consumer Cyclical 15.25% 13.09%
Basic Materials 1.65% 3.56%

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.

DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.

IVW is 14.99% more exposed to the Technology sector than DFAC (37.8% vs 22.81%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 7.81% higher and 2.16% higher respectively (15.44% vs. 7.63% and 15.25% vs. 13.09%). In total, Utilities, Real Estate, and Basic Materials also make up 2.24% less of the fund’s holdings compared to DFAC (3.23% vs. 5.47%).

Holdings

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

DFAC - Holdings

DFAC Holdings Weight
Apple Inc 4.7%
Microsoft Corp 3.81%
Amazon.com Inc 2.39%
Johnson & Johnson 1.05%
Facebook Inc Class A 1.05%
JPMorgan Chase & Co 1.0%
Alphabet Inc Class C 0.85%
Alphabet Inc Class A 0.84%
Berkshire Hathaway Inc Class B 0.75%
Visa Inc Class A 0.74%

DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.

JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.

Risk Analysis

IVW DFAC
Mean Return 1.44 1.19
R-squared 93.82 95.1
Std. Deviation 13.77 15.55
Alpha 2.19 -2.75
Beta 0.98 1.12
Sharpe Ratio 1.21 0.88
Treynor Ratio 17.24 11.85

The iShares S&P 500 Growth ETF (IVW) has a R-squared of 93.82 with a Alpha of 2.19 and a Treynor Ratio of 17.24. Its Sharpe Ratio is 1.21 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a Beta of 0.98 and a Mean Return of 1.44.

The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Sharpe Ratio of 0.88 with a R-squared of 95.1 and a Treynor Ratio of 11.85. Its Alpha is -2.75 while DFAC’s Beta is 1.12. Furthermore, the fund has a Mean Return of 1.19 and a Standard Deviation of 15.55.

IVW’s Mean Return is 0.25 points higher than that of DFAC and its R-squared is 1.28 points lower. With a Standard Deviation of 13.77, IVW is slightly less volatile than DFAC. The Alpha and Beta of IVW are 4.94 points higher and 0.14 points lower than DFAC’s Alpha and Beta.

Performance

Annual Returns

IVW vs. DFAC - Annual Returns

Year IVW DFAC
2020 33.21% 15.8%
2019 30.91% 29.54%
2018 -0.17% -9.43%
2017 27.2% 18.82%
2016 6.74% 16.31%
2015 5.33% -2.53%
2014 14.67% 9.56%
2013 32.48% 37.55%
2012 14.39% 17.93%
2011 4.49% -1.96%
2010 14.84% 21.67%

IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% respectively.

The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.

Portfolio Growth

IVW vs. DFAC - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $51,915 16.74%
DFAC $10,000 $38,796 13.93%

A $10,000 investment in IVW would have resulted in a final balance of $51,915. This is a profit of $41,915 over 11 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

With a $10,000 investment in DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.

IVW’s CAGR is 2.80 percentage points higher than that of DFAC and as a result, would have yielded $13,119 more on a $10,000 investment. Thus, IVW outperformed DFAC by 2.80% annually.


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