IWD vs. VT: What’s The Difference?

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

The expense ratio of IWD is 0.11 percentage points higher than VT’s (0.19% vs. 0.08%). IWD also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided higher returns than VT over the past ten years.

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

Summary

IWD VT
Name iShares Russell 1000 Value ETF Vanguard Total World Stock Index Fund ETF Shares
Category Large Value N/A
Issuer iShares Vanguard
AUM 54.1B 30.44B
Avg. Return 11.40% 10.42%
Div. Yield 1.57% 1.65%
Expense Ratio 0.19% 0.08%

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 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%.

IWD’s dividend yield is 0.08% lower than that of VT (1.57% vs. 1.65%). Also, IWD yielded on average 0.98% more per year over the past decade (11.40% vs. 10.42%). The expense ratio of IWD is 0.11 percentage points higher than VT’s (0.19% vs. 0.08%).

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Fund Composition

Industry Exposure

IWD vs. VT - Industry Exposure

IWD VT
Technology 10.28% 19.63%
Industrials 11.77% 10.7%
Energy 4.76% 3.48%
Communication Services 8.67% 9.02%
Utilities 4.88% 2.6%
Healthcare 17.78% 11.58%
Consumer Defensive 7.76% 6.71%
Real Estate 4.94% 3.64%
Financial Services 20.43% 15.36%
Consumer Cyclical 5.62% 12.32%
Basic Materials 3.1% 4.97%

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 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%.

IWD is 5.07% more exposed to the Financial Services sector than VT (20.43% vs 15.36%). IWD’s exposure to Healthcare and Industrials stocks is 6.20% higher and 1.07% higher respectively (17.78% vs. 11.58% and 11.77% vs. 10.7%). In total, Energy, Utilities, and Real Estate also make up 4.86% more of the fund’s holdings compared to VT (14.58% vs. 9.72%).

Holdings

IWD - Holdings

IWD Holdings Weight
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%
Pfizer Inc 1.18%

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%.

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%.

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Risk Analysis

IWD VT
Mean Return 1.03 0.9
R-squared 92.38 99.35
Std. Deviation 14.35 14.19
Alpha -3.23 0.2
Beta 1.02 1.01
Sharpe Ratio 0.81 0.71
Treynor Ratio 11.06 9.5

The iShares Russell 1000 Value ETF (IWD) has a Treynor Ratio of 11.06 with a Sharpe Ratio of 0.81 and a Standard Deviation of 14.35. Its Beta is 1.02 while IWD’s Alpha is -3.23. Furthermore, the fund has a R-squared of 92.38 and a Mean Return of 1.03.

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

IWD’s Mean Return is 0.13 points higher than that of VT and its R-squared is 6.97 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than VT. The Alpha and Beta of IWD are 3.43 points lower and 0.01 points higher than VT’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. VT - Annual Returns

Year IWD VT
2020 2.67% 16.74%
2019 26.34% 26.8%
2018 -8.4% -9.67%
2017 13.47% 24.19%
2016 17.09% 8.77%
2015 -3.95% -1.88%
2014 13.21% 3.97%
2013 32.18% 22.98%
2012 17.28% 17.33%
2011 0.21% -7.71%
2010 15.3% 13.05%

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 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

IWD vs. VT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
VT $10,000 $27,739 10.42%

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 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%.

IWD’s CAGR is 0.98 percentage points higher than that of VT and as a result, would have yielded $3,007 more on a $10,000 investment. Thus, IWD outperformed VT by 0.98% annually.


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