The iShares Russell 1000 Growth ETF (IWF) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between IWF and VXF? And which fund is better?
The expense ratio of IWF is 0.13 percentage points higher than VXF’s (0.19% vs. 0.06%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than VXF over the past ten years.
In this article, we’ll compare IWF vs. VXF. We’ll look at risk metrics and holdings, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss IWF’s and VXF’s fund composition, annual returns, and performance and examine how these affect their overall returns.
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Summary
| IWF | VXF | |
| Name | iShares Russell 1000 Growth ETF | Vanguard Extended Market Index Fund ETF Shares |
| Category | Large Growth | Mid-Cap Growth |
| Issuer | iShares | Vanguard |
| AUM | 72.16B | 114.53B |
| Avg. Return | 17.72% | 15.47% |
| Div. Yield | 0.52% | 1.19% |
| Expense Ratio | 0.19% | 0.06% |
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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
IWF’s dividend yield is 0.67% lower than that of VXF (0.52% vs. 1.19%). Also, IWF yielded on average 2.25% more per year over the past decade (17.72% vs. 15.47%). The expense ratio of IWF is 0.13 percentage points higher than VXF’s (0.19% vs. 0.06%).
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Fund Composition
Industry Exposure
| IWF | VXF | |
| Technology | 39.29% | 23.61% |
| Industrials | 6.19% | 11.31% |
| Energy | 0.28% | 2.46% |
| Communication Services | 12.82% | 7.29% |
| Utilities | 0.03% | 1.65% |
| Healthcare | 9.23% | 15.25% |
| Consumer Defensive | 4.31% | 3.09% |
| Real Estate | 1.85% | 8.16% |
| Financial Services | 7.36% | 12.56% |
| Consumer Cyclical | 17.62% | 11.35% |
| Basic Materials | 1.01% | 3.26% |
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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
IWF is 15.68% more exposed to the Technology sector than VXF (39.29% vs 23.61%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 6.27% higher and 5.53% higher respectively (17.62% vs. 11.35% and 12.82% vs. 7.29%). In total, Energy, Basic Materials, and Real Estate also make up 10.74% less of the fund’s holdings compared to VXF (3.14% vs. 13.88%).
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%.
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
Risk Analysis
| IWF | VXF | |
| Mean Return | 1.48 | 1.24 |
| R-squared | 92.93 | 85.73 |
| Std. Deviation | 14.42 | 18.04 |
| Alpha | 2.16 | -3.26 |
| Beta | 1.03 | 1.23 |
| Sharpe Ratio | 1.19 | 0.79 |
| Treynor Ratio | 17.1 | 10.92 |
The iShares Russell 1000 Growth ETF (IWF) has a Beta of 1.03 with a Mean Return of 1.48 and a R-squared of 92.93. Its Alpha is 2.16 while IWF’s Sharpe Ratio is 1.19. Furthermore, the fund has a Treynor Ratio of 17.1 and a Standard Deviation of 14.42.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Treynor Ratio of 10.92 with a Standard Deviation of 18.04 and a R-squared of 85.73. Its Alpha is -3.26 while VXF’s Sharpe Ratio is 0.79. Furthermore, the fund has a Mean Return of 1.24 and a Beta of 1.23.
IWF’s Mean Return is 0.24 points higher than that of VXF and its R-squared is 7.20 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than VXF. The Alpha and Beta of IWF are 5.42 points higher and 0.20 points lower than VXF’s Alpha and Beta.
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Performance
Annual Returns
| Year | IWF | VXF |
| 2020 | 38.21% | 32.19% |
| 2019 | 36.08% | 28.04% |
| 2018 | -1.68% | -9.37% |
| 2017 | 29.96% | 18.1% |
| 2016 | 6.92% | 16.16% |
| 2015 | 5.48% | -3.26% |
| 2014 | 12.84% | 7.55% |
| 2013 | 33.19% | 38.37% |
| 2012 | 15.03% | 18.48% |
| 2011 | 2.47% | -3.61% |
| 2010 | 16.47% | 27.55% |
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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $55,920 | 17.72% |
| VXF | $10,000 | $44,130 | 15.47% |
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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
IWF’s CAGR is 2.25 percentage points higher than that of VXF and as a result, would have yielded $11,790 more on a $10,000 investment. Thus, IWF outperformed VXF by 2.25% annually.
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