The iShares S&P 500 Growth ETF (IVW) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and TLT is a iShares Long Government fund. So, what’s the difference between IVW and TLT? And which fund is better?
The expense ratio of IVW is 0.03 percentage points higher than TLT’s (0.18% vs. 0.15%). IVW also has a high exposure to the technology sector while TLT is mostly comprised of AAA bonds. Overall, IVW has provided higher returns than TLT over the past ten years.
In this article, we’ll compare IVW vs. TLT. We’ll look at industry exposure and performance, as well as at their fund composition and holdings. Moreover, I’ll also discuss IVW’s and TLT’s risk metrics, annual returns, and portfolio growth and examine how these affect their overall returns.
|Name||iShares S&P 500 Growth ETF||iShares 20+ 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 20+ Year Treasury Bond ETF (TLT) is a Long Government fund that is issued by iShares. It currently has 15.15B total assets under management and has yielded an average annual return of 9.00% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
IVW’s dividend yield is 0.89% lower than that of TLT (0.61% vs. 1.5%). Also, IVW yielded on average 7.74% more per year over the past decade (16.74% vs. 9.00%). The expense ratio of IVW is 0.03 percentage points higher than TLT’s (0.18% vs. 0.15%).
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|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%.
|TLT Bond Sectors||Weight|
TLT’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.
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The iShares S&P 500 Growth ETF (IVW) has a Sharpe Ratio of 1.21 with a R-squared of 93.82 and a Mean Return of 1.44. Its Alpha is 2.19 while IVW’s Beta is 0.98. Furthermore, the fund has a Treynor Ratio of 17.24 and a Standard Deviation of 13.77.
The iShares 20+ Year Treasury Bond ETF (TLT) has a R-squared of 68.76 with a Alpha of -2.83 and a Sharpe Ratio of 0.55. Its Treynor Ratio is 1.82 while TLT’s Beta is 3.54. Furthermore, the fund has a Mean Return of 0.63 and a Standard Deviation of 12.76.
IVW’s Mean Return is 0.81 points higher than that of TLT and its R-squared is 25.06 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than TLT. The Alpha and Beta of IVW are 5.02 points higher and 2.56 points lower than TLT’s Alpha and Beta.
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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 TLT, returning 33.6% on an annual basis. The poorest year for TLT in the last ten years was 2013, with a yield of -13.91%. Most years the iShares 20+ Year Treasury Bond ETF has given investors modest returns, such as in 2012, 2017, and 2010, when gains were 3.25%, 8.92%, and 9.25% 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 TLT, the end total would have been $23,809. This equates to a $13,809 profit over 11 years and a compound annual growth rate (CAGR) of 9.00%.
IVW’s CAGR is 7.74 percentage points higher than that of TLT and as a result, would have yielded $28,106 more on a $10,000 investment. Thus, IVW outperformed TLT by 7.74% annually.
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