The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Mid-Cap Index Fund ETF Shares (VO) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VO is a Vanguard Mid-Cap Blend fund. So, what’s the difference between IWF and VO? And which fund is better?
The expense ratio of IWF is 0.15 percentage points higher than VO’s (0.19% vs. 0.04%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than VO over the past ten years.
In this article, we’ll compare IWF vs. VO. We’ll look at annual returns and holdings, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss IWF’s and VO’s performance, portfolio growth, and industry exposure and examine how these affect their overall returns.
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Summary
| IWF | VO | |
| Name | iShares Russell 1000 Growth ETF | Vanguard Mid-Cap Index Fund ETF Shares |
| Category | Large Growth | Mid-Cap Blend |
| Issuer | iShares | Vanguard |
| AUM | 72.16B | 154.08B |
| Avg. Return | 17.72% | 14.34% |
| Div. Yield | 0.52% | 1.23% |
| Expense Ratio | 0.19% | 0.04% |
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 Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
IWF’s dividend yield is 0.71% lower than that of VO (0.52% vs. 1.23%). Also, IWF yielded on average 3.39% more per year over the past decade (17.72% vs. 14.34%). The expense ratio of IWF is 0.15 percentage points higher than VO’s (0.19% vs. 0.04%).
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Fund Composition
Industry Exposure
| IWF | VO | |
| Technology | 39.29% | 22.01% |
| Industrials | 6.19% | 11.92% |
| Energy | 0.28% | 3.82% |
| Communication Services | 12.82% | 5.61% |
| Utilities | 0.03% | 5.12% |
| Healthcare | 9.23% | 13.03% |
| Consumer Defensive | 4.31% | 3.25% |
| Real Estate | 1.85% | 8.67% |
| Financial Services | 7.36% | 11.08% |
| Consumer Cyclical | 17.62% | 12.12% |
| Basic Materials | 1.01% | 3.36% |
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 Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
IWF is 17.28% more exposed to the Technology sector than VO (39.29% vs 22.01%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 5.50% higher and 7.21% higher respectively (17.62% vs. 12.12% and 12.82% vs. 5.61%). In total, Energy, Basic Materials, and Real Estate also make up 12.71% less of the fund’s holdings compared to VO (3.14% vs. 15.85%).
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%.
| VO Holdings | Weight |
| IDEXX Laboratories Inc | 0.78% |
| DocuSign Inc | 0.75% |
| Marvell Technology Inc | 0.68% |
| IQVIA Holdings Inc | 0.68% |
| Chipotle Mexican Grill Inc | 0.63% |
| Veeva Systems Inc Class A | 0.62% |
| Digital Realty Trust Inc | 0.62% |
| Centene Corp | 0.62% |
| Aptiv PLC | 0.62% |
| Carrier Global Corp Ordinary Shares | 0.61% |
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
Risk Analysis
| IWF | VO | |
| Mean Return | 1.48 | 1.14 |
| R-squared | 92.93 | 92.22 |
| Std. Deviation | 14.42 | 15.65 |
| Alpha | 2.16 | -2.71 |
| Beta | 1.03 | 1.11 |
| Sharpe Ratio | 1.19 | 0.83 |
| Treynor Ratio | 17.1 | 11.32 |
The iShares Russell 1000 Growth ETF (IWF) has a Standard Deviation of 14.42 with a Sharpe Ratio of 1.19 and a Mean Return of 1.48. Its Beta is 1.03 while IWF’s Alpha is 2.16. Furthermore, the fund has a R-squared of 92.93 and a Treynor Ratio of 17.1.
The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Standard Deviation of 15.65 with a Alpha of -2.71 and a Sharpe Ratio of 0.83. Its Mean Return is 1.14 while VO’s Treynor Ratio is 11.32. Furthermore, the fund has a Beta of 1.11 and a R-squared of 92.22.
IWF’s Mean Return is 0.34 points higher than that of VO and its R-squared is 0.71 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than VO. The Alpha and Beta of IWF are 4.87 points higher and 0.08 points lower than VO’s Alpha and Beta.
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Performance
Annual Returns
| Year | IWF | VO |
| 2020 | 38.21% | 18.22% |
| 2019 | 36.08% | 31.04% |
| 2018 | -1.68% | -9.21% |
| 2017 | 29.96% | 19.25% |
| 2016 | 6.92% | 11.23% |
| 2015 | 5.48% | -1.34% |
| 2014 | 12.84% | 13.76% |
| 2013 | 33.19% | 35.15% |
| 2012 | 15.03% | 15.98% |
| 2011 | 2.47% | -1.96% |
| 2010 | 16.47% | 25.57% |
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 VO, returning 35.15% on an annual basis. The poorest year for VO in the last ten years was 2018, with a yield of -9.21%. Most years the Vanguard Mid-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2012, and 2020, when gains were 13.76%, 15.98%, and 18.22% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $55,920 | 17.72% |
| VO | $10,000 | $40,404 | 14.34% |
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 VO, the end total would have been $40,404. This equates to a $30,404 profit over 11 years and a compound annual growth rate (CAGR) of 14.34%.
IWF’s CAGR is 3.39 percentage points higher than that of VO and as a result, would have yielded $15,516 more on a $10,000 investment. Thus, IWF outperformed VO by 3.39% annually.
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