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IWP vs. VLUE: What’s The Difference?

The iShares Russell Mid-Cap Growth ETF (IWP) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IWP is a iShares Mid-Cap Growth fund and VLUE is a iShares Large Value fund. So, what’s the difference between IWP and VLUE? And which fund is better?

The expense ratio of IWP is 0.09 percentage points higher than VLUE’s (0.24% vs. 0.15%). IWP also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWP has provided higher returns than VLUE over the past 7 years.

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

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Summary

IWPVLUE
NameiShares Russell Mid-Cap Growth ETFiShares MSCI USA Value Factor ETF
CategoryMid-Cap GrowthLarge Value
IssueriSharesiShares
AUM15.7B15.95B
Avg. Return16.75%8.91%
Div. Yield0.26%1.89%
Expense Ratio0.24%0.15%

The iShares Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

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%.

IWP’s dividend yield is 1.63% lower than that of VLUE (0.26% vs. 1.89%). Also, IWP yielded on average 7.84% more per year over the past decade (16.75% vs. 8.91%). The expense ratio of IWP is 0.09 percentage points higher than VLUE’s (0.24% vs. 0.15%).

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Fund Composition

Industry Exposure

IWP vs. VLUE - Industry Exposure

IWPVLUE
Technology33.88%26.89%
Industrials14.09%9.14%
Energy1.51%2.42%
Communication Services6.32%10.39%
Utilities0.16%2.68%
Healthcare16.79%14.31%
Consumer Defensive2.32%7.22%
Real Estate2.46%3.19%
Financial Services4.52%10.96%
Consumer Cyclical16.09%10.66%
Basic Materials1.86%2.14%

The iShares Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

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%.

IWP is 6.99% more exposed to the Technology sector than VLUE (33.88% vs 26.89%). IWP’s exposure to Healthcare and Consumer Cyclical stocks is 2.48% higher and 5.43% higher respectively (16.79% vs. 14.31% and 16.09% vs. 10.66%). In total, Energy, Basic Materials, and Consumer Defensive also make up 6.09% less of the fund’s holdings compared to VLUE (5.69% vs. 11.78%).

Holdings

IWP - Holdings

IWP HoldingsWeight
IDEXX Laboratories Inc1.3%
DocuSign Inc1.3%
Roku Inc Class A1.29%
Match Group Inc1.06%
Chipotle Mexican Grill Inc1.06%
Pinterest Inc1.05%
Veeva Systems Inc Class A1.04%
Palantir Technologies Inc Ordinary Shares – Class A1.04%
Lululemon Athletica Inc1.01%
DexCom Inc1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

VLUE - Holdings

VLUE HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

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

IWPVLUE
Mean Return1.270
R-squared87.010
Std. Deviation16.050
Alpha-1.030
Beta1.10
Sharpe Ratio0.910
Treynor Ratio12.980

The iShares Russell Mid-Cap Growth ETF (IWP) has a Mean Return of 1.27 with a Standard Deviation of 16.05 and a Sharpe Ratio of 0.91. Its Alpha is -1.03 while IWP’s R-squared is 87.01. Furthermore, the fund has a Treynor Ratio of 12.98 and a Beta of 1.1.

The iShares MSCI USA Value Factor ETF (VLUE) has a Beta of 0 with a Standard Deviation of 0 and a Alpha of 0. Its Treynor Ratio is 0 while VLUE’s Mean Return is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a R-squared of 0.

IWP’s Mean Return is 1.27 points higher than that of VLUE and its R-squared is 87.01 points higher. With a Standard Deviation of 16.05, IWP is slightly more volatile than VLUE. The Alpha and Beta of IWP are 1.03 points lower and 1.10 points higher than VLUE’s Alpha and Beta.

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Performance

Annual Returns

IWP vs. VLUE - Annual Returns

YearIWPVLUE
202035.29%-0.32%
201935.14%27.47%
2018-4.95%-11.18%
201724.98%21.97%
20167.15%15.68%
2015-0.39%-3.54%
201411.68%12.29%
201335.44%0.0%
201215.62%0.0%
2011-1.82%0.0%
201026.1%0.0%

IWP had its best year in 2013 with an annual return of 35.44%. IWP’s worst year over the past decade yielded -4.95% and occurred in 2018. In most years the iShares Russell Mid-Cap Growth ETF provided moderate returns such as in 2014, 2012, and 2017 where annual returns amounted to 11.68%, 15.62%, and 24.98% 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

IWP vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWP$10,000$25,88816.75%
VLUE$10,000$17,2478.91%

A $10,000 investment in IWP would have resulted in a final balance of $25,888. This is a profit of $15,888 over 7 years and amounts to a compound annual growth rate (CAGR) of 16.75%.

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%.

IWP’s CAGR is 7.84 percentage points higher than that of VLUE and as a result, would have yielded $8,641 more on a $10,000 investment. Thus, IWP outperformed VLUE by 7.84% annually.


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