The iShares Russell 1000 ETF (IWB) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between IWB and VOE? And which fund is better?
The expense ratio of IWB is 0.08 percentage points higher than VOE’s (0.15% vs. 0.07%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than VOE over the past ten years.
In this article, we’ll compare IWB vs. VOE. We’ll look at annual returns and performance, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss IWB’s and VOE’s fund composition, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||iShares Russell 1000 ETF||Vanguard Mid-Cap Value Index Fund ETF Shares|
|Category||Large Blend||Mid-Cap Value|
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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
IWB’s dividend yield is 0.73% lower than that of VOE (1.14% vs. 1.87%). Also, IWB yielded on average 2.11% more per year over the past decade (14.64% vs. 12.52%). The expense ratio of IWB is 0.08 percentage points higher than VOE’s (0.15% vs. 0.07%).
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 Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
IWB is 15.48% more exposed to the Technology sector than VOE (25.33% vs 9.85%). IWB’s exposure to Financial Services and Healthcare stocks is 4.62% lower and 6.31% higher respectively (13.64% vs. 18.26% and 13.35% vs. 7.04%). In total, Utilities, Energy, and Real Estate also make up 19.96% less of the fund’s holdings compared to VOE (8.14% vs. 28.10%).
|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%.
|Carrier Global Corp Ordinary Shares||1.28%|
|International Flavors & Fragrances Inc||1.13%|
|Motorola Solutions Inc||1.12%|
|Discover Financial Services||1.09%|
|Valero Energy Corp||0.97%|
|Willis Towers Watson PLC||0.9%|
|D.R. Horton Inc||0.89%|
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
The iShares Russell 1000 ETF (IWB) has a Treynor Ratio of 14.31 with a Alpha of -0.38 and a Beta of 1.02. Its R-squared is 99.73 while IWB’s Sharpe Ratio is 1.05. Furthermore, the fund has a Mean Return of 1.27 and a Standard Deviation of 13.87.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Standard Deviation of 15.98 with a R-squared of 88.76 and a Alpha of -3.77. Its Sharpe Ratio is 0.75 while VOE’s Beta is 1.11. Furthermore, the fund has a Mean Return of 1.05 and a Treynor Ratio of 10.19.
IWB’s Mean Return is 0.22 points higher than that of VOE and its R-squared is 10.97 points higher. With a Standard Deviation of 13.87, IWB is slightly less volatile than VOE. The Alpha and Beta of IWB are 3.39 points higher and 0.09 points lower than VOE’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 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% 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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
IWB’s CAGR is 2.11 percentage points higher than that of VOE and as a result, would have yielded $8,807 more on a $10,000 investment. Thus, IWB outperformed VOE by 2.11% annually.
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