The iShares Russell 1000 Growth ETF (IWF) and the iShares U.S. Treasury Bond ETF (GOVT) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and GOVT is a iShares Intermediate Government fund. So, what’s the difference between IWF and GOVT? And which fund is better?
The expense ratio of IWF is 0.14 percentage points higher than GOVT’s (0.19% vs. 0.05%). IWF also has a high exposure to the technology sector while GOVT is mostly comprised of AAA bonds. Overall, IWF has provided higher returns than GOVT over the past ten years.
In this article, we’ll compare IWF vs. GOVT. We’ll look at performance and holdings, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss IWF’s and GOVT’s portfolio growth, fund composition, and industry exposure and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
Summary
| IWF | GOVT | |
| Name | iShares Russell 1000 Growth ETF | iShares U.S. Treasury Bond ETF |
| Category | Large Growth | Intermediate Government |
| Issuer | iShares | iShares |
| AUM | 72.16B | 17.07B |
| Avg. Return | 17.72% | 2.67% |
| Div. Yield | 0.52% | 1.0% |
| 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 iShares U.S. Treasury Bond ETF (GOVT) is a Intermediate Government fund that is issued by iShares. It currently has 17.07B total assets under management and has yielded an average annual return of 2.67% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.05%.
IWF’s dividend yield is 0.48% lower than that of GOVT (0.52% vs. 1.0%). Also, IWF yielded on average 15.05% more per year over the past decade (17.72% vs. 2.67%). The expense ratio of IWF is 0.14 percentage points higher than GOVT’s (0.19% vs. 0.05%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
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%.
| GOVT Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
GOVT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| IWF | GOVT | |
| Mean Return | 1.48 | 0 |
| R-squared | 92.93 | 0 |
| Std. Deviation | 14.42 | 0 |
| Alpha | 2.16 | 0 |
| Beta | 1.03 | 0 |
| Sharpe Ratio | 1.19 | 0 |
| Treynor Ratio | 17.1 | 0 |
The iShares Russell 1000 Growth ETF (IWF) has a R-squared of 92.93 with a Beta of 1.03 and a Alpha of 2.16. Its Sharpe Ratio is 1.19 while IWF’s Standard Deviation is 14.42. Furthermore, the fund has a Mean Return of 1.48 and a Treynor Ratio of 17.1.
The iShares U.S. Treasury Bond ETF (GOVT) has a R-squared of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Alpha is 0 while GOVT’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Treynor Ratio of 0.
IWF’s Mean Return is 1.48 points higher than that of GOVT and its R-squared is 92.93 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than GOVT. The Alpha and Beta of IWF are 2.16 points higher and 1.03 points higher than GOVT’s Alpha and Beta.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
Performance
Annual Returns
| Year | IWF | GOVT |
| 2020 | 38.21% | 7.92% |
| 2019 | 36.08% | 6.71% |
| 2018 | -1.68% | 0.74% |
| 2017 | 29.96% | 2.19% |
| 2016 | 6.92% | 0.92% |
| 2015 | 5.48% | 0.76% |
| 2014 | 12.84% | 4.99% |
| 2013 | 33.19% | -2.84% |
| 2012 | 15.03% | 0.0% |
| 2011 | 2.47% | 0.0% |
| 2010 | 16.47% | 0.0% |
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 2020 was the strongest year for GOVT, returning 7.92% on an annual basis. The poorest year for GOVT in the last ten years was 2013, with a yield of -2.84%. Most years the iShares U.S. Treasury Bond ETF has given investors modest returns, such as in 2018, 2015, and 2016, when gains were 0.74%, 0.76%, and 0.92% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $40,733 | 17.72% |
| GOVT | $10,000 | $12,297 | 2.67% |
A $10,000 investment in IWF would have resulted in a final balance of $40,733. This is a profit of $30,733 over 8 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
With a $10,000 investment in GOVT, the end total would have been $12,297. This equates to a $2,297 profit over 8 years and a compound annual growth rate (CAGR) of 2.67%.
IWF’s CAGR is 15.05 percentage points higher than that of GOVT and as a result, would have yielded $28,436 more on a $10,000 investment. Thus, IWF outperformed GOVT by 15.05% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
