The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VIG is a Vanguard Large Blend fund. So, what’s the difference between IWF and VIG? And which fund is better?
The expense ratio of IWF is 0.13 percentage points higher than VIG’s (0.19% vs. 0.06%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than VIG over the past ten years.
In this article, we’ll compare IWF vs. VIG. We’ll look at performance and fund composition, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss IWF’s and VIG’s industry exposure, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| IWF | VIG | |
| Name | iShares Russell 1000 Growth ETF | Vanguard Dividend Appreciation Index Fund ETF Shares |
| Category | Large Growth | Large Blend |
| Issuer | iShares | Vanguard |
| AUM | 72.16B | 71.92B |
| Avg. Return | 17.72% | 13.35% |
| Div. Yield | 0.52% | 1.56% |
| Expense Ratio | 0.19% | 0.06% |
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 Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.
IWF’s dividend yield is 1.04% lower than that of VIG (0.52% vs. 1.56%). Also, IWF yielded on average 4.38% more per year over the past decade (17.72% vs. 13.35%). The expense ratio of IWF is 0.13 percentage points higher than VIG’s (0.19% vs. 0.06%).
Fund Composition
Industry Exposure
| IWF | VIG | |
| Technology | 39.29% | 14.93% |
| Industrials | 6.19% | 17.23% |
| Energy | 0.28% | 0.0% |
| Communication Services | 12.82% | 2.86% |
| Utilities | 0.03% | 2.81% |
| Healthcare | 9.23% | 15.52% |
| Consumer Defensive | 4.31% | 15.32% |
| Real Estate | 1.85% | 0.0% |
| Financial Services | 7.36% | 17.18% |
| Consumer Cyclical | 17.62% | 10.47% |
| Basic Materials | 1.01% | 3.67% |
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 Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.
VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.
IWF is 24.36% more exposed to the Technology sector than VIG (39.29% vs 14.93%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 7.15% higher and 9.96% higher respectively (17.62% vs. 10.47% and 12.82% vs. 2.86%). In total, Energy, Basic Materials, and Real Estate also make up 0.53% less of the fund’s holdings compared to VIG (3.14% vs. 3.67%).
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%.
| VIG Holdings | Weight |
| Microsoft Corp | 4.19% |
| JPMorgan Chase & Co | 3.8% |
| Johnson & Johnson | 3.67% |
| Walmart Inc | 3.38% |
| Visa Inc Class A | 3.22% |
| UnitedHealth Group Inc | 3.22% |
| The Home Depot Inc | 2.91% |
| Procter & Gamble Co | 2.82% |
| Comcast Corp Class A | 2.21% |
| Coca-Cola Co | 1.98% |
VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.
UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.
Risk Analysis
| IWF | VIG | |
| Mean Return | 1.48 | 1.09 |
| R-squared | 92.93 | 92.2 |
| Std. Deviation | 14.42 | 12.25 |
| Alpha | 2.16 | 0.12 |
| Beta | 1.03 | 0.86 |
| Sharpe Ratio | 1.19 | 1.01 |
| Treynor Ratio | 17.1 | 14.33 |
The iShares Russell 1000 Growth ETF (IWF) has a Mean Return of 1.48 with a Treynor Ratio of 17.1 and a R-squared of 92.93. Its Sharpe Ratio is 1.19 while IWF’s Alpha is 2.16. Furthermore, the fund has a Standard Deviation of 14.42 and a Beta of 1.03.
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Treynor Ratio of 14.33 with a Sharpe Ratio of 1.01 and a Beta of 0.86. Its Standard Deviation is 12.25 while VIG’s Mean Return is 1.09. Furthermore, the fund has a R-squared of 92.2 and a Alpha of 0.12.
IWF’s Mean Return is 0.39 points higher than that of VIG and its R-squared is 0.73 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than VIG. The Alpha and Beta of IWF are 2.04 points higher and 0.17 points higher than VIG’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | VIG |
| 2020 | 38.21% | 15.46% |
| 2019 | 36.08% | 29.71% |
| 2018 | -1.68% | -2.02% |
| 2017 | 29.96% | 22.22% |
| 2016 | 6.92% | 11.84% |
| 2015 | 5.48% | -1.95% |
| 2014 | 12.84% | 10.06% |
| 2013 | 33.19% | 28.99% |
| 2012 | 15.03% | 11.61% |
| 2011 | 2.47% | 6.21% |
| 2010 | 16.47% | 14.67% |
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 VIG, returning 29.71% on an annual basis. The poorest year for VIG in the last ten years was 2018, with a yield of -2.02%. Most years the Vanguard Dividend Appreciation Index Fund ETF Shares has given investors modest returns, such as in 2012, 2016, and 2010, when gains were 11.61%, 11.84%, and 14.67% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $55,920 | 17.72% |
| VIG | $10,000 | $37,951 | 13.35% |
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 VIG, the end total would have been $37,951. This equates to a $27,951 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.
IWF’s CAGR is 4.38 percentage points higher than that of VIG and as a result, would have yielded $17,969 more on a $10,000 investment. Thus, IWF outperformed VIG by 4.38% annually.
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