The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Short-Term Bond Index Fund ETF Shares (BSV) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and BSV is a Vanguard Short-Term Bond fund. So, what’s the difference between IWF and BSV? And which fund is better?
The expense ratio of IWF is 0.14 percentage points higher than BSV’s (0.19% vs. 0.05%). IWF also has a high exposure to the technology sector while BSV is mostly comprised of AAA bonds. Overall, IWF has provided higher returns than BSV over the past ten years.
In this article, we’ll compare IWF vs. BSV. We’ll look at holdings and industry exposure, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss IWF’s and BSV’s performance, annual returns, and fund composition and examine how these affect their overall returns.
Summary
| IWF | BSV | |
| Name | iShares Russell 1000 Growth ETF | Vanguard Short-Term Bond Index Fund ETF Shares |
| Category | Large Growth | Short-Term Bond |
| Issuer | iShares | Vanguard |
| AUM | 72.16B | 67.71B |
| Avg. Return | 17.72% | 2.27% |
| Div. Yield | 0.52% | 1.48% |
| Expense Ratio | 0.19% | 0.05% |
The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.
IWF’s dividend yield is 0.96% lower than that of BSV (0.52% vs. 1.48%). Also, IWF yielded on average 15.45% more per year over the past decade (17.72% vs. 2.27%). The expense ratio of IWF is 0.14 percentage points higher than BSV’s (0.19% vs. 0.05%).
Fund Composition
Holdings
| IWF Holdings | Weight |
| Apple Inc | 10.51% |
| Microsoft Corp | 9.85% |
| Amazon.com Inc | 6.63% |
| Facebook Inc Class A | 3.91% |
| Alphabet Inc Class A | 3.2% |
| Alphabet Inc Class C | 3.03% |
| Tesla Inc | 2.45% |
| NVIDIA Corp | 2.14% |
| Visa Inc Class A | 1.91% |
| The Home Depot Inc | 1.62% |
IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.
Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.
| BSV Bond Sectors | Weight |
| AAA | 71.65% |
| BBB | 13.08% |
| A | 11.95% |
| AA | 3.28% |
| Others | 0.03% |
| Below B | 0.01% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| IWF | BSV | |
| Mean Return | 1.48 | 0.16 |
| R-squared | 92.93 | 78.38 |
| Std. Deviation | 14.42 | 1.33 |
| Alpha | 2.16 | 0.21 |
| Beta | 1.03 | 0.38 |
| Sharpe Ratio | 1.19 | 0.98 |
| Treynor Ratio | 17.1 | 3.33 |
The iShares Russell 1000 Growth ETF (IWF) has a Mean Return of 1.48 with a Standard Deviation of 14.42 and a R-squared of 92.93. Its Beta is 1.03 while IWF’s Treynor Ratio is 17.1. Furthermore, the fund has a Alpha of 2.16 and a Sharpe Ratio of 1.19.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Sharpe Ratio of 0.98 with a Beta of 0.38 and a Treynor Ratio of 3.33. Its Mean Return is 0.16 while BSV’s Alpha is 0.21. Furthermore, the fund has a R-squared of 78.38 and a Standard Deviation of 1.33.
IWF’s Mean Return is 1.32 points higher than that of BSV and its R-squared is 14.55 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than BSV. The Alpha and Beta of IWF are 1.95 points higher and 0.65 points higher than BSV’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | BSV |
| 2020 | 38.21% | 4.67% |
| 2019 | 36.08% | 4.92% |
| 2018 | -1.68% | 1.34% |
| 2017 | 29.96% | 1.2% |
| 2016 | 6.92% | 1.42% |
| 2015 | 5.48% | 0.92% |
| 2014 | 12.84% | 1.32% |
| 2013 | 33.19% | 0.17% |
| 2012 | 15.03% | 1.98% |
| 2011 | 2.47% | 3.04% |
| 2010 | 16.47% | 4.0% |
IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% respectively.
The year 2019 was the strongest year for BSV, returning 4.92% on an annual basis. The poorest year for BSV in the last ten years was 2013, with a yield of 0.17%. Most years the Vanguard Short-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2018, 2016, and 2012, when gains were 1.34%, 1.42%, and 1.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $55,920 | 17.72% |
| BSV | $10,000 | $12,785 | 2.27% |
A $10,000 investment in IWF would have resulted in a final balance of $55,920. This is a profit of $45,920 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
With a $10,000 investment in BSV, the end total would have been $12,785. This equates to a $2,785 profit over 11 years and a compound annual growth rate (CAGR) of 2.27%.
IWF’s CAGR is 15.45 percentage points higher than that of BSV and as a result, would have yielded $43,135 more on a $10,000 investment. Thus, IWF outperformed BSV by 15.45% annually.
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