The iShares S&P 500 Growth ETF (IVW) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between IVW and VGK? And which fund is better?
The expense ratio of IVW is 0.10 percentage points higher than VGK’s (0.18% vs. 0.08%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than VGK over the past ten years.
In this article, we’ll compare IVW vs. VGK. We’ll look at portfolio growth and holdings, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss IVW’s and VGK’s risk metrics, performance, and annual returns and examine how these affect their overall returns.
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Summary
| IVW | VGK | |
| Name | iShares S&P 500 Growth ETF | Vanguard FTSE Europe Index Fund ETF Shares |
| Category | Large Growth | Europe Stock |
| Issuer | iShares | Vanguard |
| AUM | 35.72B | 25.7B |
| Avg. Return | 16.74% | 6.68% |
| Div. Yield | 0.61% | 2.52% |
| Expense Ratio | 0.18% | 0.08% |
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 FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
IVW’s dividend yield is 1.91% lower than that of VGK (0.61% vs. 2.52%). Also, IVW yielded on average 10.06% more per year over the past decade (16.74% vs. 6.68%). The expense ratio of IVW is 0.10 percentage points higher than VGK’s (0.18% vs. 0.08%).
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Fund Composition
Industry Exposure
| IVW | VGK | |
| Technology | 37.8% | 8.3% |
| Industrials | 5.72% | 15.58% |
| Energy | 0.06% | 4.3% |
| Communication Services | 15.44% | 5.09% |
| Utilities | 0.47% | 3.89% |
| Healthcare | 11.88% | 13.76% |
| Consumer Defensive | 3.84% | 11.39% |
| Real Estate | 1.11% | 2.57% |
| Financial Services | 6.78% | 15.85% |
| Consumer Cyclical | 15.25% | 11.6% |
| Basic Materials | 1.65% | 7.67% |
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 FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
IVW is 29.50% more exposed to the Technology sector than VGK (37.8% vs 8.3%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 10.35% higher and 3.65% higher respectively (15.44% vs. 5.09% and 15.25% vs. 11.6%). In total, Utilities, Real Estate, and Basic Materials also make up 10.90% less of the fund’s holdings compared to VGK (3.23% vs. 14.13%).
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%.
| VGK Holdings | Weight |
| Nestle SA | 2.82% |
| ASML Holding NV | 2.2% |
| Roche Holding AG | 2.13% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.58% |
| Novartis AG | 1.55% |
| AstraZeneca PLC | 1.27% |
| SAP SE | 1.25% |
| Unilever PLC | 1.23% |
| Novo Nordisk A/S B | 1.09% |
| Siemens AG | 0.96% |
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
Risk Analysis
| IVW | VGK | |
| Mean Return | 1.44 | 0.61 |
| R-squared | 93.82 | 92.76 |
| Std. Deviation | 13.77 | 16.65 |
| Alpha | 2.19 | 0.45 |
| Beta | 0.98 | 1.06 |
| Sharpe Ratio | 1.21 | 0.4 |
| Treynor Ratio | 17.24 | 5.12 |
The iShares S&P 500 Growth ETF (IVW) has a Treynor Ratio of 17.24 with a Standard Deviation of 13.77 and a Mean Return of 1.44. Its Beta is 0.98 while IVW’s Sharpe Ratio is 1.21. Furthermore, the fund has a R-squared of 93.82 and a Alpha of 2.19.
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Standard Deviation of 16.65 with a R-squared of 92.76 and a Treynor Ratio of 5.12. Its Alpha is 0.45 while VGK’s Mean Return is 0.61. Furthermore, the fund has a Sharpe Ratio of 0.4 and a Beta of 1.06.
IVW’s Mean Return is 0.83 points higher than that of VGK and its R-squared is 1.06 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than VGK. The Alpha and Beta of IVW are 1.74 points higher and 0.08 points lower than VGK’s Alpha and Beta.
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Performance
Annual Returns
| Year | IVW | VGK |
| 2020 | 33.21% | 6.5% |
| 2019 | 30.91% | 24.26% |
| 2018 | -0.17% | -14.79% |
| 2017 | 27.2% | 27.06% |
| 2016 | 6.74% | -0.59% |
| 2015 | 5.33% | -1.87% |
| 2014 | 14.67% | -6.56% |
| 2013 | 32.48% | 24.93% |
| 2012 | 14.39% | 21.01% |
| 2011 | 4.49% | -11.49% |
| 2010 | 14.84% | 5.01% |
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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IVW | $10,000 | $51,915 | 16.74% |
| VGK | $10,000 | $18,350 | 6.68% |
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 VGK, the end total would have been $18,350. This equates to a $8,350 profit over 11 years and a compound annual growth rate (CAGR) of 6.68%.
IVW’s CAGR is 10.06 percentage points higher than that of VGK and as a result, would have yielded $33,565 more on a $10,000 investment. Thus, IVW outperformed VGK by 10.06% annually.
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