The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Information Technology Index Fund ETF Shares (VGT) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VGT is a Vanguard Technology fund. So, what’s the difference between IWF and VGT? And which fund is better?
The expense ratio of IWF is 0.09 percentage points higher than VGT’s (0.19% vs. 0.1%). IWF also has a lower exposure to the technology sector and a lower standard deviation. Overall, IWF has provided lower returns than VGT over the past ten years.
In this article, we’ll compare IWF vs. VGT. We’ll look at risk metrics and fund composition, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss IWF’s and VGT’s holdings, performance, and annual returns and examine how these affect their overall returns.
|Name||iShares Russell 1000 Growth ETF||Vanguard Information Technology Index Fund ETF Shares|
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 Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.
IWF’s dividend yield is 0.14% lower than that of VGT (0.52% vs. 0.66%). Also, IWF yielded on average 3.11% less per year over the past decade (17.72% vs. 20.84%). The expense ratio of IWF is 0.09 percentage points higher than VGT’s (0.19% vs. 0.1%).
The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.
IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.
The Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.
IWF is 49.60% less exposed to the Technology sector than VGT (39.29% vs 88.89%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 17.62% higher and 12.21% higher respectively (17.62% vs. 0.0% and 12.82% vs. 0.61%). In total, Energy, Basic Materials, and Real Estate also make up 3.14% more of the fund’s holdings compared to VGT (3.14% vs. 0.00%).
|Facebook Inc Class A||3.91%|
|Alphabet Inc Class A||3.2%|
|Alphabet Inc Class C||3.03%|
|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%.
|Visa Inc Class A||3.16%|
|PayPal Holdings Inc||2.76%|
|Mastercard Inc Class A||2.76%|
|Cisco Systems Inc||1.9%|
VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.
Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.
The iShares Russell 1000 Growth ETF (IWF) has a Standard Deviation of 14.42 with a R-squared of 92.93 and a Treynor Ratio of 17.1. Its Sharpe Ratio is 1.19 while IWF’s Beta is 1.03. Furthermore, the fund has a Alpha of 2.16 and a Mean Return of 1.48.
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a R-squared of 74.84 with a Beta of 1.02 and a Mean Return of 1.76. Its Alpha is 10.41 while VGT’s Sharpe Ratio is 1.23. Furthermore, the fund has a Standard Deviation of 16.61 and a Treynor Ratio of 20.55.
IWF’s Mean Return is 0.28 points lower than that of VGT and its R-squared is 18.09 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than VGT. The Alpha and Beta of IWF are 8.25 points lower and 0.01 points higher than VGT’s Alpha and Beta.
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 VGT, returning 48.68% on an annual basis. The poorest year for VGT in the last ten years was 2011, with a yield of 0.52%. Most years the Vanguard Information Technology Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2014, when gains were 13.73%, 14.05%, and 18.01% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VGT, the end total would have been $72,718. This equates to a $62,718 profit over 11 years and a compound annual growth rate (CAGR) of 20.84%.
IWF’s CAGR is 3.11 percentage points lower than that of VGT and as a result, would have yielded $16,798 less on a $10,000 investment. Thus, IWF performed worse than VGT by 3.11% annually.
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