The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VHT is a Vanguard Health fund. So, what’s the difference between IWF and VHT? And which fund is better?
The expense ratio of IWF is 0.09 percentage points higher than VHT’s (0.19% vs. 0.1%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than VHT over the past ten years.
In this article, we’ll compare IWF vs. VHT. We’ll look at industry exposure and risk metrics, as well as at their portfolio growth and performance. Moreover, I’ll also discuss IWF’s and VHT’s holdings, annual returns, and fund composition 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 | VHT | |
| Name | iShares Russell 1000 Growth ETF | Vanguard Health Care Index Fund ETF Shares |
| Category | Large Growth | Health |
| Issuer | iShares | Vanguard |
| AUM | 72.16B | 17.94B |
| Avg. Return | 17.72% | 16.04% |
| Div. Yield | 0.52% | 1.15% |
| Expense Ratio | 0.19% | 0.1% |
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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
IWF’s dividend yield is 0.63% lower than that of VHT (0.52% vs. 1.15%). Also, IWF yielded on average 1.69% more per year over the past decade (17.72% vs. 16.04%). The expense ratio of IWF is 0.09 percentage points higher than VHT’s (0.19% vs. 0.1%).
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
Industry Exposure
| IWF | VHT | |
| Technology | 39.29% | 0.05% |
| Industrials | 6.19% | 0.05% |
| Energy | 0.28% | 0.0% |
| Communication Services | 12.82% | 0.0% |
| Utilities | 0.03% | 0.0% |
| Healthcare | 9.23% | 99.57% |
| Consumer Defensive | 4.31% | 0.0% |
| Real Estate | 1.85% | 0.0% |
| Financial Services | 7.36% | 0.02% |
| Consumer Cyclical | 17.62% | 0.0% |
| Basic Materials | 1.01% | 0.31% |
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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
IWF is 39.24% more exposed to the Technology sector than VHT (39.29% vs 0.05%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 17.62% higher and 12.82% higher respectively (17.62% vs. 0.0% and 12.82% vs. 0.0%). In total, Energy, Basic Materials, and Real Estate also make up 2.83% more of the fund’s holdings compared to VHT (3.14% vs. 0.31%).
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%.
| VHT Holdings | Weight |
| Johnson & Johnson | 7.34% |
| UnitedHealth Group Inc | 6.44% |
| Pfizer Inc | 3.7% |
| Abbott Laboratories | 3.48% |
| Thermo Fisher Scientific Inc | 3.37% |
| AbbVie Inc | 3.37% |
| Merck & Co Inc | 3.33% |
| Eli Lilly and Co | 3.17% |
| Danaher Corp | 2.91% |
| Medtronic PLC | 2.83% |
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
Risk Analysis
| IWF | VHT | |
| Mean Return | 1.48 | 1.33 |
| R-squared | 92.93 | 59.86 |
| Std. Deviation | 14.42 | 13.58 |
| Alpha | 2.16 | 7.99 |
| Beta | 1.03 | 0.75 |
| Sharpe Ratio | 1.19 | 1.13 |
| Treynor Ratio | 17.1 | 20.74 |
The iShares Russell 1000 Growth ETF (IWF) has a Beta of 1.03 with a Mean Return of 1.48 and a Alpha of 2.16. Its Treynor Ratio is 17.1 while IWF’s R-squared is 92.93. Furthermore, the fund has a Standard Deviation of 14.42 and a Sharpe Ratio of 1.19.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a Alpha of 7.99 with a Treynor Ratio of 20.74 and a R-squared of 59.86. Its Mean Return is 1.33 while VHT’s Sharpe Ratio is 1.13. Furthermore, the fund has a Standard Deviation of 13.58 and a Beta of 0.75.
IWF’s Mean Return is 0.15 points higher than that of VHT and its R-squared is 33.07 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than VHT. The Alpha and Beta of IWF are 5.83 points lower and 0.28 points higher than VHT’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 | VHT |
| 2020 | 38.21% | 18.21% |
| 2019 | 36.08% | 21.97% |
| 2018 | -1.68% | 5.55% |
| 2017 | 29.96% | 23.34% |
| 2016 | 6.92% | -3.33% |
| 2015 | 5.48% | 7.22% |
| 2014 | 12.84% | 25.38% |
| 2013 | 33.19% | 42.67% |
| 2012 | 15.03% | 19.1% |
| 2011 | 2.47% | 10.57% |
| 2010 | 16.47% | 5.75% |
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 2013 was the strongest year for VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $55,920 | 17.72% |
| VHT | $10,000 | $48,464 | 16.04% |
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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
IWF’s CAGR is 1.69 percentage points higher than that of VHT and as a result, would have yielded $7,456 more on a $10,000 investment. Thus, IWF outperformed VHT by 1.69% 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.
