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IVW vs. VXF: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between IVW and VXF? And which fund is better?

The expense ratio of IVW is 0.12 percentage points higher than VXF’s (0.18% vs. 0.06%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than VXF over the past ten years.

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

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Summary

IVWVXF
NameiShares S&P 500 Growth ETFVanguard Extended Market Index Fund ETF Shares
CategoryLarge GrowthMid-Cap Growth
IssueriSharesVanguard
AUM35.72B114.53B
Avg. Return16.74%15.47%
Div. Yield0.61%1.19%
Expense Ratio0.18%0.06%

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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.

IVW’s dividend yield is 0.58% lower than that of VXF (0.61% vs. 1.19%). Also, IVW yielded on average 1.26% more per year over the past decade (16.74% vs. 15.47%). The expense ratio of IVW is 0.12 percentage points higher than VXF’s (0.18% vs. 0.06%).

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Fund Composition

Industry Exposure

IVW vs. VXF - Industry Exposure

IVWVXF
Technology37.8%23.61%
Industrials5.72%11.31%
Energy0.06%2.46%
Communication Services15.44%7.29%
Utilities0.47%1.65%
Healthcare11.88%15.25%
Consumer Defensive3.84%3.09%
Real Estate1.11%8.16%
Financial Services6.78%12.56%
Consumer Cyclical15.25%11.35%
Basic Materials1.65%3.26%

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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.

VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.

IVW is 14.19% more exposed to the Technology sector than VXF (37.8% vs 23.61%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 8.15% higher and 3.90% higher respectively (15.44% vs. 7.29% and 15.25% vs. 11.35%). In total, Utilities, Real Estate, and Basic Materials also make up 9.84% less of the fund’s holdings compared to VXF (3.23% vs. 13.07%).

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%.

VXF - Holdings

VXF HoldingsWeight
Square Inc A1.2%
Zoom Video Communications Inc1.04%
Uber Technologies Inc0.93%
Moderna Inc0.9%
Blackstone Group Inc0.83%
Snap Inc Class A0.8%
Twilio Inc A0.73%
DocuSign Inc0.68%
CrowdStrike Holdings Inc Class A0.63%
Marvell Technology Inc0.6%

VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.

Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.

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Risk Analysis

IVWVXF
Mean Return1.441.24
R-squared93.8285.73
Std. Deviation13.7718.04
Alpha2.19-3.26
Beta0.981.23
Sharpe Ratio1.210.79
Treynor Ratio17.2410.92

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

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Treynor Ratio of 10.92 with a Alpha of -3.26 and a Beta of 1.23. Its Standard Deviation is 18.04 while VXF’s Sharpe Ratio is 0.79. Furthermore, the fund has a R-squared of 85.73 and a Mean Return of 1.24.

IVW’s Mean Return is 0.20 points higher than that of VXF and its R-squared is 8.09 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than VXF. The Alpha and Beta of IVW are 5.45 points higher and 0.25 points lower than VXF’s Alpha and Beta.

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Performance

Annual Returns

IVW vs. VXF - Annual Returns

YearIVWVXF
202033.21%32.19%
201930.91%28.04%
2018-0.17%-9.37%
201727.2%18.1%
20166.74%16.16%
20155.33%-3.26%
201414.67%7.55%
201332.48%38.37%
201214.39%18.48%
20114.49%-3.61%
201014.84%27.55%

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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.

Portfolio Growth

IVW vs. VXF - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVW$10,000$51,91516.74%
VXF$10,000$44,13015.47%

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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.

IVW’s CAGR is 1.26 percentage points higher than that of VXF and as a result, would have yielded $7,785 more on a $10,000 investment. Thus, IVW outperformed VXF by 1.26% annually.


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