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IWF vs. VTIP: What’s The Difference?

The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between IWF and VTIP? And which fund is better?

The expense ratio of IWF is 0.14 percentage points higher than VTIP’s (0.19% vs. 0.05%). IWF also has a high exposure to the technology sector while VTIP is mostly comprised of AAA bonds. Overall, IWF has provided higher returns than VTIP over the past ten years.

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

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Summary

IWFVTIP
NameiShares Russell 1000 Growth ETFVanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares
CategoryLarge GrowthInflation-Protected Bond
IssueriSharesVanguard
AUM72.16B50.67B
Avg. Return17.72%1.79%
Div. Yield0.52%1.35%
Expense Ratio0.19%0.05%

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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.

IWF’s dividend yield is 0.83% lower than that of VTIP (0.52% vs. 1.35%). Also, IWF yielded on average 15.93% more per year over the past decade (17.72% vs. 1.79%). The expense ratio of IWF is 0.14 percentage points higher than VTIP’s (0.19% vs. 0.05%).

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Fund Composition

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%.

VTIP - Holdings

VTIP Bond SectorsWeight
AAA99.87%
Others0.13%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.

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Risk Analysis

IWFVTIP
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 Mean Return of 1.48 with a R-squared of 92.93 and a Sharpe Ratio of 1.19. Its Standard Deviation is 14.42 while IWF’s Beta is 1.03. Furthermore, the fund has a Alpha of 2.16 and a Treynor Ratio of 17.1.

The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a Standard Deviation of 0 with a Beta of 0 and a Sharpe Ratio of 0. Its R-squared is 0 while VTIP’s Treynor Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Mean Return of 0.

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

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Performance

Annual Returns

IWF vs. VTIP - Annual Returns

YearIWFVTIP
202038.21%4.97%
201936.08%4.83%
2018-1.68%0.54%
201729.96%0.82%
20166.92%2.71%
20155.48%-0.15%
201412.84%-1.17%
201333.19%-1.55%
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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.

Portfolio Growth

IWF vs. VTIP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWF$10,000$30,58217.72%
VTIP$10,000$11,3051.79%

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 VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.

IWF’s CAGR is 15.93 percentage points higher than that of VTIP and as a result, would have yielded $19,277 more on a $10,000 investment. Thus, IWF outperformed VTIP by 15.93% annually.


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