IWB vs. VLUE: What’s The Difference?

The iShares Russell 1000 ETF (IWB) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between IWB and VLUE? And which fund is better?

IWB and VLUE have the same expense ratio: 0.15%. IWB also has a lower exposure to the technology sector and a higher standard deviation. Overall, IWB has provided higher returns than VLUE over the past ten years.

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

Summary

IWB VLUE
Name iShares Russell 1000 ETF iShares MSCI USA Value Factor ETF
Category Large Blend Large Value
Issuer iShares iShares
AUM 30.54B 15.95B
Avg. Return 14.64% 8.91%
Div. Yield 1.14% 1.89%
Expense Ratio 0.15% 0.15%

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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

IWB’s dividend yield is 0.75% lower than that of VLUE (1.14% vs. 1.89%). Also, IWB yielded on average 5.73% more per year over the past decade (14.64% vs. 8.91%). IWB and VLUE have the same expense ratio: 0.15%.

Fund Composition

Industry Exposure

IWB vs. VLUE - Industry Exposure

IWB VLUE
Technology 25.33% 26.89%
Industrials 8.88% 9.14%
Energy 2.44% 2.42%
Communication Services 10.83% 10.39%
Utilities 2.36% 2.68%
Healthcare 13.35% 14.31%
Consumer Defensive 5.97% 7.22%
Real Estate 3.34% 3.19%
Financial Services 13.64% 10.96%
Consumer Cyclical 11.85% 10.66%
Basic Materials 2.02% 2.14%

The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

The iShares MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

IWB is 1.56% less exposed to the Technology sector than VLUE (25.33% vs 26.89%). IWB’s exposure to Financial Services and Healthcare stocks is 2.68% higher and 0.96% lower respectively (13.64% vs. 10.96% and 13.35% vs. 14.31%). In total, Utilities, Energy, and Real Estate also make up 0.15% less of the fund’s holdings compared to VLUE (8.14% vs. 8.29%).

Holdings

IWB - 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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

Risk Analysis

IWB VLUE
Mean Return 1.27 0
R-squared 99.73 0
Std. Deviation 13.87 0
Alpha -0.38 0
Beta 1.02 0
Sharpe Ratio 1.05 0
Treynor Ratio 14.31 0

The iShares Russell 1000 ETF (IWB) has a Alpha of -0.38 with a Treynor Ratio of 14.31 and a R-squared of 99.73. Its Standard Deviation is 13.87 while IWB’s Beta is 1.02. Furthermore, the fund has a Sharpe Ratio of 1.05 and a Mean Return of 1.27.

The iShares MSCI USA Value Factor ETF (VLUE) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while VLUE’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.

IWB’s Mean Return is 1.27 points higher than that of VLUE and its R-squared is 99.73 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than VLUE. The Alpha and Beta of IWB are 0.38 points lower and 1.02 points higher than VLUE’s Alpha and Beta.

Performance

Annual Returns

IWB vs. VLUE - Annual Returns

Year IWB VLUE
2020 20.8% -0.32%
2019 31.26% 27.47%
2018 -4.91% -11.18%
2017 21.53% 21.97%
2016 11.91% 15.68%
2015 0.82% -3.54%
2014 13.08% 12.29%
2013 32.93% 0.0%
2012 16.27% 0.0%
2011 1.36% 0.0%
2010 15.94% 0.0%

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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

IWB vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWB $10,000 $23,378 14.64%
VLUE $10,000 $17,247 8.91%

A $10,000 investment in IWB would have resulted in a final balance of $23,378. This is a profit of $13,378 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.64%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

IWB’s CAGR is 5.73 percentage points higher than that of VLUE and as a result, would have yielded $6,131 more on a $10,000 investment. Thus, IWB outperformed VLUE by 5.73% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply