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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.

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Summary

IWBVLUE
NameiShares Russell 1000 ETFiShares MSCI USA Value Factor ETF
CategoryLarge BlendLarge Value
IssueriSharesiShares
AUM30.54B15.95B
Avg. Return14.64%8.91%
Div. Yield1.14%1.89%
Expense Ratio0.15%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%.

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Fund Composition

Industry Exposure

IWB vs. VLUE - Industry Exposure

IWBVLUE
Technology25.33%26.89%
Industrials8.88%9.14%
Energy2.44%2.42%
Communication Services10.83%10.39%
Utilities2.36%2.68%
Healthcare13.35%14.31%
Consumer Defensive5.97%7.22%
Real Estate3.34%3.19%
Financial Services13.64%10.96%
Consumer Cyclical11.85%10.66%
Basic Materials2.02%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 HoldingsWeight
Apple Inc5.45%
Microsoft Corp5.11%
Amazon.com Inc3.43%
Facebook Inc Class A2.03%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.82%
Tesla Inc1.27%
Berkshire Hathaway Inc Class B1.24%
NVIDIA Corp1.11%
JPMorgan Chase & Co1.09%

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 HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

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%.

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Risk Analysis

IWBVLUE
Mean Return1.270
R-squared99.730
Std. Deviation13.870
Alpha-0.380
Beta1.020
Sharpe Ratio1.050
Treynor Ratio14.310

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.

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Performance

Annual Returns

IWB vs. VLUE - Annual Returns

YearIWBVLUE
202020.8%-0.32%
201931.26%27.47%
2018-4.91%-11.18%
201721.53%21.97%
201611.91%15.68%
20150.82%-3.54%
201413.08%12.29%
201332.93%0.0%
201216.27%0.0%
20111.36%0.0%
201015.94%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

FundInitial BalanceFinal BalanceCAGR
IWB$10,000$23,37814.64%
VLUE$10,000$17,2478.91%

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.


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