The iShares S&P 500 Growth ETF (IVW) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and VBR is a Vanguard Small Value fund. So, what’s the difference between IVW and VBR? And which fund is better?
The expense ratio of IVW is 0.11 percentage points higher than VBR’s (0.18% vs. 0.07%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than VBR over the past ten years.
In this article, we’ll compare IVW vs. VBR. We’ll look at risk metrics and performance, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss IVW’s and VBR’s annual returns, holdings, and portfolio growth and examine how these affect their overall returns.
Summary
| IVW | VBR | |
| Name | iShares S&P 500 Growth ETF | Vanguard Small-Cap Value Index Fund ETF Shares |
| Category | Large Growth | Small Value |
| Issuer | iShares | Vanguard |
| AUM | 35.72B | 48.08B |
| Avg. Return | 16.74% | 12.28% |
| Div. Yield | 0.61% | 1.6% |
| Expense Ratio | 0.18% | 0.07% |
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 Vanguard Small-Cap Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.
IVW’s dividend yield is 0.99% lower than that of VBR (0.61% vs. 1.6%). Also, IVW yielded on average 4.45% more per year over the past decade (16.74% vs. 12.28%). The expense ratio of IVW is 0.11 percentage points higher than VBR’s (0.18% vs. 0.07%).
Fund Composition
Industry Exposure
| IVW | VBR | |
| Technology | 37.8% | 8.39% |
| Industrials | 5.72% | 18.44% |
| Energy | 0.06% | 5.15% |
| Communication Services | 15.44% | 1.77% |
| Utilities | 0.47% | 3.65% |
| Healthcare | 11.88% | 7.16% |
| Consumer Defensive | 3.84% | 4.36% |
| Real Estate | 1.11% | 10.92% |
| Financial Services | 6.78% | 20.04% |
| Consumer Cyclical | 15.25% | 13.82% |
| Basic Materials | 1.65% | 6.31% |
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 Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.
VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.
IVW is 29.41% more exposed to the Technology sector than VBR (37.8% vs 8.39%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 13.67% higher and 1.43% higher respectively (15.44% vs. 1.77% and 15.25% vs. 13.82%). In total, Utilities, Real Estate, and Basic Materials also make up 17.65% less of the fund’s holdings compared to VBR (3.23% vs. 20.88%).
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%.
| VBR Holdings | Weight |
| Diamondback Energy Inc | 0.55% |
| VICI Properties Inc Ordinary Shares | 0.54% |
| IDEX Corp | 0.54% |
| Nuance Communications Inc | 0.5% |
| Molina Healthcare Inc | 0.48% |
| Signature Bank | 0.46% |
| Novavax Inc | 0.44% |
| Howmet Aerospace Inc | 0.44% |
| Apollo Global Management Inc Class A | 0.42% |
| Brown & Brown Inc | 0.41% |
VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.
Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.
Risk Analysis
| IVW | VBR | |
| Mean Return | 1.44 | 1.08 |
| R-squared | 93.82 | 82.2 |
| Std. Deviation | 13.77 | 18.37 |
| Alpha | 2.19 | -5.09 |
| Beta | 0.98 | 1.23 |
| Sharpe Ratio | 1.21 | 0.67 |
| Treynor Ratio | 17.24 | 9.15 |
The iShares S&P 500 Growth ETF (IVW) has a Standard Deviation of 13.77 with a R-squared of 93.82 and a Treynor Ratio of 17.24. Its Alpha is 2.19 while IVW’s Sharpe Ratio is 1.21. Furthermore, the fund has a Mean Return of 1.44 and a Beta of 0.98.
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Standard Deviation of 18.37 with a Mean Return of 1.08 and a Beta of 1.23. Its Treynor Ratio is 9.15 while VBR’s R-squared is 82.2. Furthermore, the fund has a Sharpe Ratio of 0.67 and a Alpha of -5.09.
IVW’s Mean Return is 0.36 points higher than that of VBR and its R-squared is 11.62 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than VBR. The Alpha and Beta of IVW are 7.28 points higher and 0.25 points lower than VBR’s Alpha and Beta.
Performance
Annual Returns
| Year | IVW | VBR |
| 2020 | 33.21% | 5.82% |
| 2019 | 30.91% | 22.76% |
| 2018 | -0.17% | -12.22% |
| 2017 | 27.2% | 11.79% |
| 2016 | 6.74% | 24.8% |
| 2015 | 5.33% | -4.67% |
| 2014 | 14.67% | 10.55% |
| 2013 | 32.48% | 36.57% |
| 2012 | 14.39% | 18.78% |
| 2011 | 4.49% | -4.05% |
| 2010 | 14.84% | 24.97% |
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 VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IVW | $10,000 | $51,915 | 16.74% |
| VBR | $10,000 | $32,611 | 12.28% |
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 VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.
IVW’s CAGR is 4.45 percentage points higher than that of VBR and as a result, would have yielded $19,304 more on a $10,000 investment. Thus, IVW outperformed VBR by 4.45% annually.
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