The iShares Russell 1000 ETF (IWB) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IWB and BIV? And which fund is better?
The expense ratio of IWB is 0.10 percentage points higher than BIV’s (0.15% vs. 0.05%). IWB also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, IWB has provided higher returns than BIV over the past ten years.
In this article, we’ll compare IWB vs. BIV. We’ll look at holdings and annual returns, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss IWB’s and BIV’s portfolio growth, performance, and risk metrics and examine how these affect their overall returns.
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Summary
| IWB | BIV | |
| Name | iShares Russell 1000 ETF | Vanguard Intermediate-Term Bond Index Fund ETF Shares |
| Category | Large Blend | Intermediate-Term Bond |
| Issuer | iShares | Vanguard |
| AUM | 30.54B | 39.05B |
| Avg. Return | 14.64% | 5.31% |
| Div. Yield | 1.14% | 2.06% |
| Expense Ratio | 0.15% | 0.05% |
The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
IWB’s dividend yield is 0.92% lower than that of BIV (1.14% vs. 2.06%). Also, IWB yielded on average 9.32% more per year over the past decade (14.64% vs. 5.31%). The expense ratio of IWB is 0.10 percentage points higher than BIV’s (0.15% vs. 0.05%).
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Fund Composition
Holdings
| IWB Holdings | Weight |
| Apple Inc | 5.45% |
| Microsoft Corp | 5.11% |
| Amazon.com Inc | 3.43% |
| Facebook Inc Class A | 2.03% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.82% |
| Tesla Inc | 1.27% |
| Berkshire Hathaway Inc Class B | 1.24% |
| NVIDIA Corp | 1.11% |
| JPMorgan Chase & Co | 1.09% |
IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.
Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.
| BIV Bond Sectors | Weight |
| AAA | 54.51% |
| BBB | 25.24% |
| A | 16.97% |
| AA | 3.1% |
| Others | 0.15% |
| Below B | 0.03% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| IWB | BIV | |
| Mean Return | 1.27 | 0.35 |
| R-squared | 99.73 | 95.12 |
| Std. Deviation | 13.87 | 4.09 |
| Alpha | -0.38 | -0.07 |
| Beta | 1.02 | 1.33 |
| Sharpe Ratio | 1.05 | 0.89 |
| Treynor Ratio | 14.31 | 2.72 |
The iShares Russell 1000 ETF (IWB) has a Beta of 1.02 with a Treynor Ratio of 14.31 and a Alpha of -0.38. Its Standard Deviation is 13.87 while IWB’s Mean Return is 1.27. Furthermore, the fund has a Sharpe Ratio of 1.05 and a R-squared of 99.73.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Sharpe Ratio of 0.89 with a Standard Deviation of 4.09 and a R-squared of 95.12. Its Mean Return is 0.35 while BIV’s Beta is 1.33. Furthermore, the fund has a Treynor Ratio of 2.72 and a Alpha of -0.07.
IWB’s Mean Return is 0.92 points higher than that of BIV and its R-squared is 4.61 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than BIV. The Alpha and Beta of IWB are 0.31 points lower and 0.31 points lower than BIV’s Alpha and Beta.
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Performance
Annual Returns
| Year | IWB | BIV |
| 2020 | 20.8% | 9.71% |
| 2019 | 31.26% | 10.19% |
| 2018 | -4.91% | -0.09% |
| 2017 | 21.53% | 3.8% |
| 2016 | 11.91% | 2.86% |
| 2015 | 0.82% | 1.23% |
| 2014 | 13.08% | 7.0% |
| 2013 | 32.93% | -3.44% |
| 2012 | 16.27% | 7.02% |
| 2011 | 1.36% | 10.62% |
| 2010 | 15.94% | 9.55% |
IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWB | $10,000 | $42,462 | 14.64% |
| BIV | $10,000 | $17,492 | 5.31% |
A $10,000 investment in IWB would have resulted in a final balance of $42,462. This is a profit of $32,462 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.64%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
IWB’s CAGR is 9.32 percentage points higher than that of BIV and as a result, would have yielded $24,970 more on a $10,000 investment. Thus, IWB outperformed BIV by 9.32% annually.
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