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IWF vs. VLUE: What’s The Difference?

The iShares Russell 1000 Growth ETF (IWF) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VLUE is a iShares Large Value fund. So, what’s the difference between IWF and VLUE? And which fund is better?

The expense ratio of IWF is 0.04 percentage points higher than VLUE’s (0.19% vs. 0.15%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than VLUE over the past ten years.

In this article, we’ll compare IWF vs. VLUE. We’ll look at performance and fund composition, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss IWF’s and VLUE’s industry exposure, holdings, and annual returns and examine how these affect their overall returns.

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Summary

IWFVLUE
NameiShares Russell 1000 Growth ETFiShares MSCI USA Value Factor ETF
CategoryLarge GrowthLarge Value
IssueriSharesiShares
AUM72.16B15.95B
Avg. Return17.72%8.91%
Div. Yield0.52%1.89%
Expense Ratio0.19%0.15%

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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

IWF’s dividend yield is 1.37% lower than that of VLUE (0.52% vs. 1.89%). Also, IWF yielded on average 8.81% more per year over the past decade (17.72% vs. 8.91%). The expense ratio of IWF is 0.04 percentage points higher than VLUE’s (0.19% vs. 0.15%).

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Fund Composition

Industry Exposure

IWF vs. VLUE - Industry Exposure

IWFVLUE
Technology39.29%26.89%
Industrials6.19%9.14%
Energy0.28%2.42%
Communication Services12.82%10.39%
Utilities0.03%2.68%
Healthcare9.23%14.31%
Consumer Defensive4.31%7.22%
Real Estate1.85%3.19%
Financial Services7.36%10.96%
Consumer Cyclical17.62%10.66%
Basic Materials1.01%2.14%

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 iShares MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

IWF is 12.40% more exposed to the Technology sector than VLUE (39.29% vs 26.89%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 6.96% higher and 2.43% higher respectively (17.62% vs. 10.66% and 12.82% vs. 10.39%). In total, Energy, Basic Materials, and Real Estate also make up 4.61% less of the fund’s holdings compared to VLUE (3.14% vs. 7.75%).

Holdings

IWF - Holdings

IWF HoldingsWeight
Apple Inc10.51%
Microsoft Corp9.85%
Amazon.com Inc6.63%
Facebook Inc Class A3.91%
Alphabet Inc Class A3.2%
Alphabet Inc Class C3.03%
Tesla Inc2.45%
NVIDIA Corp2.14%
Visa Inc Class A1.91%
The Home Depot Inc1.62%

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%.

VLUE - Holdings

VLUE HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

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Risk Analysis

IWFVLUE
Mean Return1.480
R-squared92.930
Std. Deviation14.420
Alpha2.160
Beta1.030
Sharpe Ratio1.190
Treynor Ratio17.10

The iShares Russell 1000 Growth ETF (IWF) has a R-squared of 92.93 with a Sharpe Ratio of 1.19 and a Standard Deviation of 14.42. Its Alpha is 2.16 while IWF’s Beta is 1.03. Furthermore, the fund has a Treynor Ratio of 17.1 and a Mean Return of 1.48.

The iShares MSCI USA Value Factor ETF (VLUE) has a Alpha of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Sharpe Ratio is 0 while VLUE’s Mean Return is 0. Furthermore, the fund has a R-squared of 0 and a Standard Deviation of 0.

IWF’s Mean Return is 1.48 points higher than that of VLUE and its R-squared is 92.93 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than VLUE. The Alpha and Beta of IWF are 2.16 points higher and 1.03 points higher than VLUE’s Alpha and Beta.

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Performance

Annual Returns

IWF vs. VLUE - Annual Returns

YearIWFVLUE
202038.21%-0.32%
201936.08%27.47%
2018-1.68%-11.18%
201729.96%21.97%
20166.92%15.68%
20155.48%-3.54%
201412.84%12.29%
201333.19%0.0%
201215.03%0.0%
20112.47%0.0%
201016.47%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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

IWF vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWF$10,000$30,58217.72%
VLUE$10,000$17,2478.91%

A $10,000 investment in IWF would have resulted in a final balance of $30,582. This is a profit of $20,582 over 7 years and amounts to a compound annual growth rate (CAGR) of 17.72%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

IWF’s CAGR is 8.81 percentage points higher than that of VLUE and as a result, would have yielded $13,335 more on a $10,000 investment. Thus, IWF outperformed VLUE by 8.81% annually.


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