IVW vs. VLUE: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and VLUE is a iShares Large Value fund. So, what’s the difference between IVW and VLUE? And which fund is better?

The expense ratio of IVW is 0.03 percentage points higher than VLUE’s (0.18% vs. 0.15%). IVW also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVW has provided higher returns than VLUE over the past ten years.

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

Summary

IVW VLUE
Name iShares S&P 500 Growth ETF iShares MSCI USA Value Factor ETF
Category Large Growth Large Value
Issuer iShares iShares
AUM 35.72B 15.95B
Avg. Return 16.74% 8.91%
Div. Yield 0.61% 1.89%
Expense Ratio 0.18% 0.15%

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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

IVW’s dividend yield is 1.28% lower than that of VLUE (0.61% vs. 1.89%). Also, IVW yielded on average 7.83% more per year over the past decade (16.74% vs. 8.91%). The expense ratio of IVW is 0.03 percentage points higher than VLUE’s (0.18% vs. 0.15%).

Fund Composition

Industry Exposure

IVW vs. VLUE - Industry Exposure

IVW VLUE
Technology 37.8% 26.89%
Industrials 5.72% 9.14%
Energy 0.06% 2.42%
Communication Services 15.44% 10.39%
Utilities 0.47% 2.68%
Healthcare 11.88% 14.31%
Consumer Defensive 3.84% 7.22%
Real Estate 1.11% 3.19%
Financial Services 6.78% 10.96%
Consumer Cyclical 15.25% 10.66%
Basic Materials 1.65% 2.14%

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 iShares MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

IVW is 10.91% more exposed to the Technology sector than VLUE (37.8% vs 26.89%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 5.05% higher and 4.59% higher respectively (15.44% vs. 10.39% and 15.25% vs. 10.66%). In total, Utilities, Real Estate, and Basic Materials also make up 4.78% less of the fund’s holdings compared to VLUE (3.23% vs. 8.01%).

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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

Risk Analysis

IVW VLUE
Mean Return 1.44 0
R-squared 93.82 0
Std. Deviation 13.77 0
Alpha 2.19 0
Beta 0.98 0
Sharpe Ratio 1.21 0
Treynor Ratio 17.24 0

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

The iShares MSCI USA Value Factor ETF (VLUE) has a Mean Return of 0 with a Standard Deviation of 0 and a Alpha of 0. Its Treynor Ratio is 0 while VLUE’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Beta of 0.

IVW’s Mean Return is 1.44 points higher than that of VLUE and its R-squared is 93.82 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than VLUE. The Alpha and Beta of IVW are 2.19 points higher and 0.98 points higher than VLUE’s Alpha and Beta.

Performance

Annual Returns

IVW vs. VLUE - Annual Returns

Year IVW VLUE
2020 33.21% -0.32%
2019 30.91% 27.47%
2018 -0.17% -11.18%
2017 27.2% 21.97%
2016 6.74% 15.68%
2015 5.33% -3.54%
2014 14.67% 12.29%
2013 32.48% 0.0%
2012 14.39% 0.0%
2011 4.49% 0.0%
2010 14.84% 0.0%

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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

IVW vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $28,548 16.74%
VLUE $10,000 $17,247 8.91%

A $10,000 investment in IVW would have resulted in a final balance of $28,548. This is a profit of $18,548 over 7 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

IVW’s CAGR is 7.83 percentage points higher than that of VLUE and as a result, would have yielded $11,301 more on a $10,000 investment. Thus, IVW outperformed VLUE by 7.83% annually.


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