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.

Summary

IWF VLUE
Name iShares Russell 1000 Growth ETF iShares MSCI USA Value Factor ETF
Category Large Growth Large Value
Issuer iShares iShares
AUM 72.16B 15.95B
Avg. Return 17.72% 8.91%
Div. Yield 0.52% 1.89%
Expense Ratio 0.19% 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

IWF VLUE
Technology 39.29% 26.89%
Industrials 6.19% 9.14%
Energy 0.28% 2.42%
Communication Services 12.82% 10.39%
Utilities 0.03% 2.68%
Healthcare 9.23% 14.31%
Consumer Defensive 4.31% 7.22%
Real Estate 1.85% 3.19%
Financial Services 7.36% 10.96%
Consumer Cyclical 17.62% 10.66%
Basic Materials 1.01% 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 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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

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

IWF VLUE
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 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

Year IWF VLUE
2020 38.21% -0.32%
2019 36.08% 27.47%
2018 -1.68% -11.18%
2017 29.96% 21.97%
2016 6.92% 15.68%
2015 5.48% -3.54%
2014 12.84% 12.29%
2013 33.19% 0.0%
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 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

Fund Initial Balance Final Balance CAGR
IWF $10,000 $30,582 17.72%
VLUE $10,000 $17,247 8.91%

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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