The iShares S&P 500 Growth ETF (IVW) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and IEF is a iShares Long Government fund. So, what’s the difference between IVW and IEF? And which fund is better?
The expense ratio of IVW is 0.03 percentage points higher than IEF’s (0.18% vs. 0.15%). IVW also has a high exposure to the technology sector while IEF is mostly comprised of AAA bonds. Overall, IVW has provided higher returns than IEF over the past ten years.
In this article, we’ll compare IVW vs. IEF. We’ll look at holdings and fund composition, as well as at their performance and risk metrics. Moreover, I’ll also discuss IVW’s and IEF’s industry exposure, annual returns, and portfolio growth and examine how these affect their overall returns.
|Name||iShares S&P 500 Growth ETF||iShares 7-10 Year Treasury Bond ETF|
|Category||Large Growth||Long Government|
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 iShares 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.
IVW’s dividend yield is 0.23% lower than that of IEF (0.61% vs. 0.84%). Also, IVW yielded on average 11.67% more per year over the past decade (16.74% vs. 5.06%). The expense ratio of IVW is 0.03 percentage points higher than IEF’s (0.18% vs. 0.15%).
|Facebook Inc Class A||4.28%|
|Alphabet Inc Class A||4.06%|
|Alphabet Inc Class C||3.86%|
|PayPal Holdings Inc||1.62%|
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%.
|IEF Bond Sectors||Weight|
IEF’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
The iShares S&P 500 Growth ETF (IVW) has a Alpha of 2.19 with a Sharpe Ratio of 1.21 and a Treynor Ratio of 17.24. Its Standard Deviation is 13.77 while IVW’s R-squared is 93.82. Furthermore, the fund has a Mean Return of 1.44 and a Beta of 0.98.
The iShares 7-10 Year Treasury Bond ETF (IEF) has a Alpha of -1.2 with a Mean Return of 0.32 and a Beta of 1.59. Its Sharpe Ratio is 0.6 while IEF’s R-squared is 77.56. Furthermore, the fund has a Standard Deviation of 5.42 and a Treynor Ratio of 1.97.
IVW’s Mean Return is 1.12 points higher than that of IEF and its R-squared is 16.26 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than IEF. The Alpha and Beta of IVW are 3.39 points higher and 0.61 points lower than IEF’s Alpha and Beta.
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 2011 was the strongest year for IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IEF, the end total would have been $16,936. This equates to a $6,936 profit over 11 years and a compound annual growth rate (CAGR) of 5.06%.
IVW’s CAGR is 11.67 percentage points higher than that of IEF and as a result, would have yielded $34,979 more on a $10,000 investment. Thus, IVW outperformed IEF by 11.67% annually.
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