The iShares Russell 1000 ETF (IWB) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and IEF is a iShares Long Government fund. So, what’s the difference between IWB and IEF? And which fund is better?
IWB and IEF have the same expense ratio: 0.15%. IWB also has a high exposure to the technology sector while IEF is mostly comprised of AAA bonds. Overall, IWB has provided higher returns than IEF over the past ten years.
In this article, we’ll compare IWB vs. IEF. We’ll look at annual returns and holdings, as well as at their industry exposure and performance. Moreover, I’ll also discuss IWB’s and IEF’s fund composition, portfolio growth, and risk metrics and examine how these affect their overall returns.
|Name||iShares Russell 1000 ETF||iShares 7-10 Year Treasury Bond ETF|
|Category||Large Blend||Long Government|
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 iShares 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.
IWB’s dividend yield is 0.30% higher than that of IEF (1.14% vs. 0.84%). Also, IWB yielded on average 9.57% more per year over the past decade (14.64% vs. 5.06%). IWB and IEF have the same expense ratio: 0.15%.
|Facebook Inc Class A||2.03%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.82%|
|Berkshire Hathaway Inc Class B||1.24%|
|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%.
|IEF Bond Sectors||Weight|
IEF’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 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.
The iShares Russell 1000 ETF (IWB) has a Beta of 1.02 with a R-squared of 99.73 and a Treynor Ratio of 14.31. 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 Alpha of -0.38.
The iShares 7-10 Year Treasury Bond ETF (IEF) has a Mean Return of 0.32 with a Sharpe Ratio of 0.6 and a Treynor Ratio of 1.97. Its Beta is 1.59 while IEF’s R-squared is 77.56. Furthermore, the fund has a Alpha of -1.2 and a Standard Deviation of 5.42.
IWB’s Mean Return is 0.95 points higher than that of IEF and its R-squared is 22.17 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than IEF. The Alpha and Beta of IWB are 0.82 points higher and 0.57 points lower than IEF’s Alpha and Beta.
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 IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IEF, the end total would have been $16,936. This equates to a $6,936 profit over 11 years and a compound annual growth rate (CAGR) of 5.06%.
IWB’s CAGR is 9.57 percentage points higher than that of IEF and as a result, would have yielded $25,526 more on a $10,000 investment. Thus, IWB outperformed IEF by 9.57% annually.
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