The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between IWF and VOE? And which fund is better?
The expense ratio of IWF is 0.12 percentage points higher than VOE’s (0.19% vs. 0.07%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than VOE over the past ten years.
In this article, we’ll compare IWF vs. VOE. We’ll look at industry exposure and risk metrics, as well as at their holdings and fund composition. Moreover, I’ll also discuss IWF’s and VOE’s performance, portfolio growth, and annual returns and examine how these affect their overall returns.
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|Name||iShares Russell 1000 Growth ETF||Vanguard Mid-Cap Value Index Fund ETF Shares|
|Category||Large Growth||Mid-Cap Value|
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 Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
IWF’s dividend yield is 1.35% lower than that of VOE (0.52% vs. 1.87%). Also, IWF yielded on average 5.20% more per year over the past decade (17.72% vs. 12.52%). The expense ratio of IWF is 0.12 percentage points higher than VOE’s (0.19% vs. 0.07%).
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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 Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
IWF is 29.44% more exposed to the Technology sector than VOE (39.29% vs 9.85%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 5.82% higher and 7.55% higher respectively (17.62% vs. 11.8% and 12.82% vs. 5.27%). In total, Energy, Basic Materials, and Real Estate also make up 19.47% less of the fund’s holdings compared to VOE (3.14% vs. 22.61%).
|Facebook Inc Class A||3.91%|
|Alphabet Inc Class A||3.2%|
|Alphabet Inc Class C||3.03%|
|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%.
|Carrier Global Corp Ordinary Shares||1.28%|
|International Flavors & Fragrances Inc||1.13%|
|Motorola Solutions Inc||1.12%|
|Discover Financial Services||1.09%|
|Valero Energy Corp||0.97%|
|Willis Towers Watson PLC||0.9%|
|D.R. Horton Inc||0.89%|
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
The iShares Russell 1000 Growth ETF (IWF) has a Mean Return of 1.48 with a R-squared of 92.93 and a Sharpe Ratio of 1.19. Its Alpha is 2.16 while IWF’s Beta is 1.03. Furthermore, the fund has a Treynor Ratio of 17.1 and a Standard Deviation of 14.42.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Sharpe Ratio of 0.75 with a Mean Return of 1.05 and a R-squared of 88.76. Its Beta is 1.11 while VOE’s Alpha is -3.77. Furthermore, the fund has a Treynor Ratio of 10.19 and a Standard Deviation of 15.98.
IWF’s Mean Return is 0.43 points higher than that of VOE and its R-squared is 4.17 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than VOE. The Alpha and Beta of IWF are 5.93 points higher and 0.08 points lower than VOE’s Alpha and Beta.
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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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
IWF’s CAGR is 5.20 percentage points higher than that of VOE and as a result, would have yielded $22,265 more on a $10,000 investment. Thus, IWF outperformed VOE by 5.20% annually.
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