The iShares Russell 1000 Value ETF (IWD) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IWD and BIV? And which fund is better?
The expense ratio of IWD is 0.14 percentage points higher than BIV’s (0.19% vs. 0.05%). IWD also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, IWD has provided higher returns than BIV over the past ten years.
In this article, we’ll compare IWD vs. BIV. We’ll look at fund composition and annual returns, as well as at their performance and holdings. Moreover, I’ll also discuss IWD’s and BIV’s risk metrics, industry exposure, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Russell 1000 Value ETF||Vanguard Intermediate-Term Bond Index Fund ETF Shares|
|Category||Large Value||Intermediate-Term Bond|
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
IWD’s dividend yield is 0.49% lower than that of BIV (1.57% vs. 2.06%). Also, IWD yielded on average 6.09% more per year over the past decade (11.40% vs. 5.31%). The expense ratio of IWD is 0.14 percentage points higher than BIV’s (0.19% vs. 0.05%).
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|Berkshire Hathaway Inc Class B||2.58%|
|JPMorgan Chase & Co||2.25%|
|Johnson & Johnson||2.24%|
|UnitedHealth Group Inc||1.78%|
|Procter & Gamble Co||1.71%|
|The Walt Disney Co||1.5%|
|Bank of America Corp||1.43%|
|Comcast Corp Class A||1.33%|
|Exxon Mobil Corp||1.2%|
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
|BIV Bond Sectors||Weight|
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
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The iShares Russell 1000 Value ETF (IWD) has a Alpha of -3.23 with a Standard Deviation of 14.35 and a Sharpe Ratio of 0.81. Its R-squared is 92.38 while IWD’s Beta is 1.02. Furthermore, the fund has a Mean Return of 1.03 and a Treynor Ratio of 11.06.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Alpha of -0.07 with a Beta of 1.33 and a Treynor Ratio of 2.72. Its Mean Return is 0.35 while BIV’s Standard Deviation is 4.09. Furthermore, the fund has a R-squared of 95.12 and a Sharpe Ratio of 0.89.
IWD’s Mean Return is 0.68 points higher than that of BIV and its R-squared is 2.74 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than BIV. The Alpha and Beta of IWD are 3.16 points lower and 0.31 points lower than BIV’s Alpha and Beta.
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IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWD would have resulted in a final balance of $30,746. This is a profit of $20,746 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
IWD’s CAGR is 6.09 percentage points higher than that of BIV and as a result, would have yielded $13,254 more on a $10,000 investment. Thus, IWD outperformed BIV by 6.09% annually.
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