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IVW vs. VTIP: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between IVW and VTIP? And which fund is better?

The expense ratio of IVW is 0.13 percentage points higher than VTIP’s (0.18% vs. 0.05%). IVW also has a high exposure to the technology sector while VTIP is mostly comprised of AAA bonds. Overall, IVW has provided higher returns than VTIP over the past ten years.

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

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Summary

IVWVTIP
NameiShares S&P 500 Growth ETFVanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares
CategoryLarge GrowthInflation-Protected Bond
IssueriSharesVanguard
AUM35.72B50.67B
Avg. Return16.74%1.79%
Div. Yield0.61%1.35%
Expense Ratio0.18%0.05%

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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.

IVW’s dividend yield is 0.74% lower than that of VTIP (0.61% vs. 1.35%). Also, IVW yielded on average 14.94% more per year over the past decade (16.74% vs. 1.79%). The expense ratio of IVW is 0.13 percentage points higher than VTIP’s (0.18% vs. 0.05%).

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Fund Composition

Holdings

IVW - Holdings

IVW HoldingsWeight
Apple Inc11.46%
Microsoft Corp10.75%
Amazon.com Inc7.14%
Facebook Inc Class A4.28%
Alphabet Inc Class A4.06%
Alphabet Inc Class C3.86%
Tesla Inc2.65%
NVIDIA Corp2.43%
PayPal Holdings Inc1.62%
Adobe Inc1.49%

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%.

VTIP - Holdings

VTIP Bond SectorsWeight
AAA99.87%
Others0.13%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 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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Risk Analysis

IVWVTIP
Mean Return1.440
R-squared93.820
Std. Deviation13.770
Alpha2.190
Beta0.980
Sharpe Ratio1.210
Treynor Ratio17.240

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 Alpha is 2.19. Furthermore, the fund has a Sharpe Ratio of 1.21 and a R-squared of 93.82.

The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a Treynor Ratio of 0 with a Alpha of 0 and a Beta of 0. Its R-squared is 0 while VTIP’s Sharpe Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Standard Deviation of 0.

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

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Performance

Annual Returns

IVW vs. VTIP - Annual Returns

YearIVWVTIP
202033.21%4.97%
201930.91%4.83%
2018-0.17%0.54%
201727.2%0.82%
20166.74%2.71%
20155.33%-0.15%
201414.67%-1.17%
201332.48%-1.55%
201214.39%0.0%
20114.49%0.0%
201014.84%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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.

Portfolio Growth

IVW vs. VTIP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVW$10,000$28,54816.74%
VTIP$10,000$11,3051.79%

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 VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.

IVW’s CAGR is 14.94 percentage points higher than that of VTIP and as a result, would have yielded $17,243 more on a $10,000 investment. Thus, IVW outperformed VTIP by 14.94% annually.


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