The iShares S&P 500 Growth ETF (IVW) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and VV is a Vanguard Large Blend fund. So, what’s the difference between IVW and VV? And which fund is better?
The expense ratio of IVW is 0.14 percentage points higher than VV’s (0.18% vs. 0.04%). IVW also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVW has provided higher returns than VV over the past ten years.
In this article, we’ll compare IVW vs. VV. We’ll look at holdings and portfolio growth, as well as at their performance and industry exposure. Moreover, I’ll also discuss IVW’s and VV’s annual returns, risk metrics, and fund composition and examine how these affect their overall returns.
|Name||iShares S&P 500 Growth ETF||Vanguard Large-Cap Index Fund ETF Shares|
|Category||Large Growth||Large Blend|
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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.
IVW’s dividend yield is 0.65% lower than that of VV (0.61% vs. 1.26%). Also, IVW yielded on average 1.99% more per year over the past decade (16.74% vs. 14.75%). The expense ratio of IVW is 0.14 percentage points higher than VV’s (0.18% vs. 0.04%).
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 Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.
VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.
IVW is 12.42% more exposed to the Technology sector than VV (37.8% vs 25.38%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 3.76% higher and 3.60% higher respectively (15.44% vs. 11.68% and 15.25% vs. 11.65%). In total, Utilities, Real Estate, and Basic Materials also make up 3.95% less of the fund’s holdings compared to VV (3.23% vs. 7.18%).
|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%.
|Facebook Inc Class A||2.19%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.81%|
|Berkshire Hathaway Inc Class B||1.3%|
|JPMorgan Chase & Co||1.24%|
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
The iShares S&P 500 Growth ETF (IVW) has a Alpha of 2.19 with a Mean Return of 1.44 and a Sharpe Ratio of 1.21. Its Beta is 0.98 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a R-squared of 93.82 and a Treynor Ratio of 17.24.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Alpha of -0.08 with a Treynor Ratio of 14.14 and a Sharpe Ratio of 1.04. Its Beta is 1.01 while VV’s R-squared is 99.86. Furthermore, the fund has a Standard Deviation of 13.75 and a Mean Return of 1.24.
IVW’s Mean Return is 0.20 points higher than that of VV and its R-squared is 6.04 points lower. With a Standard Deviation of 13.77, IVW is slightly more volatile than VV. The Alpha and Beta of IVW are 2.27 points higher and 0.03 points lower than VV’s Alpha and Beta.
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 VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% 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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.
IVW’s CAGR is 1.99 percentage points higher than that of VV and as a result, would have yielded $8,945 more on a $10,000 investment. Thus, IVW outperformed VV by 1.99% annually.
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