The iShares Russell 1000 ETF (IWB) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and VV is a Vanguard Large Blend fund. So, what’s the difference between IWB and VV? And which fund is better?
The expense ratio of IWB is 0.11 percentage points higher than VV’s (0.15% vs. 0.04%). IWB also has a lower exposure to the technology sector and a higher standard deviation. Overall, IWB has provided lower returns than VV over the past ten years.
In this article, we’ll compare IWB vs. VV. We’ll look at performance and fund composition, as well as at their holdings and industry exposure. Moreover, I’ll also discuss IWB’s and VV’s risk metrics, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| IWB | VV | |
| Name | iShares Russell 1000 ETF | Vanguard Large-Cap Index Fund ETF Shares |
| Category | Large Blend | Large Blend |
| Issuer | iShares | Vanguard |
| AUM | 30.54B | 37.65B |
| Avg. Return | 14.64% | 14.75% |
| Div. Yield | 1.14% | 1.26% |
| Expense Ratio | 0.15% | 0.04% |
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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.
IWB’s dividend yield is 0.12% lower than that of VV (1.14% vs. 1.26%). Also, IWB yielded on average 0.11% less per year over the past decade (14.64% vs. 14.75%). The expense ratio of IWB is 0.11 percentage points higher than VV’s (0.15% vs. 0.04%).
Fund Composition
Industry Exposure
| IWB | VV | |
| Technology | 25.33% | 25.38% |
| Industrials | 8.88% | 8.39% |
| Energy | 2.44% | 2.62% |
| Communication Services | 10.83% | 11.68% |
| Utilities | 2.36% | 2.35% |
| Healthcare | 13.35% | 13.22% |
| Consumer Defensive | 5.97% | 6.06% |
| Real Estate | 3.34% | 2.7% |
| Financial Services | 13.64% | 13.82% |
| Consumer Cyclical | 11.85% | 11.65% |
| Basic Materials | 2.02% | 2.13% |
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 Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.
VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.
IWB is 0.05% less exposed to the Technology sector than VV (25.33% vs 25.38%). IWB’s exposure to Financial Services and Healthcare stocks is 0.18% lower and 0.13% higher respectively (13.64% vs. 13.82% and 13.35% vs. 13.22%). In total, Utilities, Energy, and Real Estate also make up 0.47% more of the fund’s holdings compared to VV (8.14% vs. 7.67%).
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%.
| VV Holdings | Weight |
| Apple Inc | 5.7% |
| Microsoft Corp | 5.35% |
| Amazon.com Inc | 3.87% |
| Facebook Inc Class A | 2.19% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.81% |
| Tesla Inc | 1.37% |
| Berkshire Hathaway Inc Class B | 1.3% |
| NVIDIA Corp | 1.24% |
| JPMorgan Chase & Co | 1.24% |
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
Risk Analysis
| IWB | VV | |
| Mean Return | 1.27 | 1.24 |
| R-squared | 99.73 | 99.86 |
| Std. Deviation | 13.87 | 13.75 |
| Alpha | -0.38 | -0.08 |
| Beta | 1.02 | 1.01 |
| Sharpe Ratio | 1.05 | 1.04 |
| Treynor Ratio | 14.31 | 14.14 |
The iShares Russell 1000 ETF (IWB) has a Alpha of -0.38 with a Beta of 1.02 and a Standard Deviation of 13.87. Its Mean Return is 1.27 while IWB’s Treynor Ratio is 14.31. Furthermore, the fund has a R-squared of 99.73 and a Sharpe Ratio of 1.05.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Treynor Ratio of 14.14 with a Beta of 1.01 and a R-squared of 99.86. Its Mean Return is 1.24 while VV’s Alpha is -0.08. Furthermore, the fund has a Standard Deviation of 13.75 and a Sharpe Ratio of 1.04.
IWB’s Mean Return is 0.03 points higher than that of VV and its R-squared is 0.13 points lower. With a Standard Deviation of 13.87, IWB is slightly more volatile than VV. The Alpha and Beta of IWB are 0.30 points lower and 0.01 points higher than VV’s Alpha and Beta.
Performance
Annual Returns
| Year | IWB | VV |
| 2020 | 20.8% | 20.99% |
| 2019 | 31.26% | 31.39% |
| 2018 | -4.91% | -4.44% |
| 2017 | 21.53% | 22.03% |
| 2016 | 11.91% | 11.65% |
| 2015 | 0.82% | 1.07% |
| 2014 | 13.08% | 13.39% |
| 2013 | 32.93% | 32.65% |
| 2012 | 16.27% | 16.09% |
| 2011 | 1.36% | 1.58% |
| 2010 | 15.94% | 15.81% |
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 VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWB | $10,000 | $42,462 | 14.64% |
| VV | $10,000 | $42,970 | 14.75% |
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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.
IWB’s CAGR is 0.11 percentage points lower than that of VV and as a result, would have yielded $508 less on a $10,000 investment. Thus, IWB performed worse than VV by 0.11% annually.
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