IWB vs. VT: What’s The Difference?

The iShares Russell 1000 ETF (IWB) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between IWB and VT? And which fund is better?

The expense ratio of IWB is 0.07 percentage points higher than VT’s (0.15% vs. 0.08%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than VT over the past ten years.

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

Summary

IWB VT
Name iShares Russell 1000 ETF Vanguard Total World Stock Index Fund ETF Shares
Category Large Blend N/A
Issuer iShares Vanguard
AUM 30.54B 30.44B
Avg. Return 14.64% 10.42%
Div. Yield 1.14% 1.65%
Expense Ratio 0.15% 0.08%

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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.

IWB’s dividend yield is 0.51% lower than that of VT (1.14% vs. 1.65%). Also, IWB yielded on average 4.22% more per year over the past decade (14.64% vs. 10.42%). The expense ratio of IWB is 0.07 percentage points higher than VT’s (0.15% vs. 0.08%).

Fund Composition

Industry Exposure

IWB vs. VT - Industry Exposure

IWB VT
Technology 25.33% 19.63%
Industrials 8.88% 10.7%
Energy 2.44% 3.48%
Communication Services 10.83% 9.02%
Utilities 2.36% 2.6%
Healthcare 13.35% 11.58%
Consumer Defensive 5.97% 6.71%
Real Estate 3.34% 3.64%
Financial Services 13.64% 15.36%
Consumer Cyclical 11.85% 12.32%
Basic Materials 2.02% 4.97%

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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.

VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.

IWB is 5.70% more exposed to the Technology sector than VT (25.33% vs 19.63%). IWB’s exposure to Financial Services and Healthcare stocks is 1.72% lower and 1.77% higher respectively (13.64% vs. 15.36% and 13.35% vs. 11.58%). In total, Utilities, Energy, and Real Estate also make up 1.58% less of the fund’s holdings compared to VT (8.14% vs. 9.72%).

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%.

VT - Holdings

VT Holdings Weight
Apple Inc 2.85%
Microsoft Corp 2.71%
Amazon.com Inc 1.98%
Facebook Inc Class A 1.1%
Alphabet Inc Class A 0.97%
Alphabet Inc Class C 0.95%
Tesla Inc 0.7%
NVIDIA Corp 0.64%
JPMorgan Chase & Co 0.62%
Tencent Holdings Ltd 0.6%

VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.

Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.

Risk Analysis

IWB VT
Mean Return 1.27 0.9
R-squared 99.73 99.35
Std. Deviation 13.87 14.19
Alpha -0.38 0.2
Beta 1.02 1.01
Sharpe Ratio 1.05 0.71
Treynor Ratio 14.31 9.5

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

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a R-squared of 99.35 with a Standard Deviation of 14.19 and a Alpha of 0.2. Its Sharpe Ratio is 0.71 while VT’s Mean Return is 0.9. Furthermore, the fund has a Treynor Ratio of 9.5 and a Beta of 1.01.

IWB’s Mean Return is 0.37 points higher than that of VT and its R-squared is 0.38 points higher. With a Standard Deviation of 13.87, IWB is slightly less volatile than VT. The Alpha and Beta of IWB are 0.58 points lower and 0.01 points higher than VT’s Alpha and Beta.

Performance

Annual Returns

IWB vs. VT - Annual Returns

Year IWB VT
2020 20.8% 16.74%
2019 31.26% 26.8%
2018 -4.91% -9.67%
2017 21.53% 24.19%
2016 11.91% 8.77%
2015 0.82% -1.88%
2014 13.08% 3.97%
2013 32.93% 22.98%
2012 16.27% 17.33%
2011 1.36% -7.71%
2010 15.94% 13.05%

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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.

Portfolio Growth

IWB vs. VT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWB $10,000 $42,462 14.64%
VT $10,000 $27,739 10.42%

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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.

IWB’s CAGR is 4.22 percentage points higher than that of VT and as a result, would have yielded $14,723 more on a $10,000 investment. Thus, IWB outperformed VT by 4.22% annually.


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