The iShares Russell 1000 Value ETF (IWD) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and ITOT is a iShares Large Blend fund. So, what’s the difference between IWD and ITOT? And which fund is better?
The expense ratio of IWD is 0.16 percentage points higher than ITOT’s (0.19% vs. 0.03%). IWD also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided lower returns than ITOT over the past ten years.
In this article, we’ll compare IWD vs. ITOT. We’ll look at annual returns and holdings, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss IWD’s and ITOT’s portfolio growth, performance, and industry exposure and examine how these affect their overall returns.
|Name||iShares Russell 1000 Value ETF||iShares Core S&P Total U.S. Stock Market ETF|
|Category||Large Value||Large Blend|
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 iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
IWD’s dividend yield is 0.37% higher than that of ITOT (1.57% vs. 1.2%). Also, IWD yielded on average 3.19% less per year over the past decade (11.40% vs. 14.59%). The expense ratio of IWD is 0.16 percentage points higher than ITOT’s (0.19% vs. 0.03%).
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.
ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.
IWD is 6.74% more exposed to the Financial Services sector than ITOT (20.43% vs 13.69%). IWD’s exposure to Healthcare and Industrials stocks is 4.19% higher and 2.56% higher respectively (17.78% vs. 13.59% and 11.77% vs. 9.21%). In total, Energy, Utilities, and Real Estate also make up 6.05% more of the fund’s holdings compared to ITOT (14.58% vs. 8.53%).
|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%.
|Facebook Inc Class A||1.89%|
|Alphabet Inc Class A||1.79%|
|Alphabet Inc Class C||1.71%|
|Berkshire Hathaway Inc Class B||1.17%|
|JPMorgan Chase & Co||1.02%|
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
The iShares Russell 1000 Value ETF (IWD) has a Treynor Ratio of 11.06 with a Beta of 1.02 and a Alpha of -3.23. Its Standard Deviation is 14.35 while IWD’s R-squared is 92.38. Furthermore, the fund has a Mean Return of 1.03 and a Sharpe Ratio of 0.81.
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a Beta of 1.03 and a Standard Deviation of 14.02. Its R-squared is 99.4 while ITOT’s Treynor Ratio is 14.13. Furthermore, the fund has a Mean Return of 1.27 and a Sharpe Ratio of 1.04.
IWD’s Mean Return is 0.24 points lower than that of ITOT and its R-squared is 7.02 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than ITOT. The Alpha and Beta of IWD are 2.69 points lower and 0.01 points lower than ITOT’s Alpha and Beta.
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 2013 was the strongest year for ITOT, returning 32.67% on an annual basis. The poorest year for ITOT in the last ten years was 2018, with a yield of -5.27%. Most years the iShares Core S&P Total U.S. Stock Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.01%, 15.98%, and 16.15% 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 ITOT, the end total would have been $42,310. This equates to a $32,310 profit over 11 years and a compound annual growth rate (CAGR) of 14.59%.
IWD’s CAGR is 3.19 percentage points lower than that of ITOT and as a result, would have yielded $11,564 less on a $10,000 investment. Thus, IWD performed worse than ITOT by 3.19% annually.
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