IWR vs. BIV: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IWR and BIV? And which fund is better?

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

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

Summary

IWR BIV
Name iShares Russell Mid-Cap ETF Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category Mid-Cap Blend Intermediate-Term Bond
Issuer iShares Vanguard
AUM 29.84B 39.05B
Avg. Return 14.15% 5.31%
Div. Yield 0.99% 2.06%
Expense Ratio 0.19% 0.05%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

IWR’s dividend yield is 1.07% lower than that of BIV (0.99% vs. 2.06%). Also, IWR yielded on average 8.84% more per year over the past decade (14.15% vs. 5.31%). The expense ratio of IWR is 0.14 percentage points higher than BIV’s (0.19% vs. 0.05%).

Fund Composition

Holdings

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

Risk Analysis

IWR BIV
Mean Return 1.17 0.35
R-squared 91.52 95.12
Std. Deviation 15.66 4.09
Alpha -2.8 -0.07
Beta 1.11 1.33
Sharpe Ratio 0.86 0.89
Treynor Ratio 11.72 2.72

The iShares Russell Mid-Cap ETF (IWR) has a Mean Return of 1.17 with a R-squared of 91.52 and a Treynor Ratio of 11.72. Its Standard Deviation is 15.66 while IWR’s Alpha is -2.8. Furthermore, the fund has a Sharpe Ratio of 0.86 and a Beta of 1.11.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a R-squared of 95.12 with a Sharpe Ratio of 0.89 and a Beta of 1.33. Its Treynor Ratio is 2.72 while BIV’s Standard Deviation is 4.09. Furthermore, the fund has a Mean Return of 0.35 and a Alpha of -0.07.

IWR’s Mean Return is 0.82 points higher than that of BIV and its R-squared is 3.60 points lower. With a Standard Deviation of 15.66, IWR is slightly more volatile than BIV. The Alpha and Beta of IWR are 2.73 points lower and 0.22 points lower than BIV’s Alpha and Beta.

Performance

Annual Returns

IWR vs. BIV - Annual Returns

Year IWR BIV
2020 16.91% 9.71%
2019 30.31% 10.19%
2018 -9.13% -0.09%
2017 18.32% 3.8%
2016 13.58% 2.86%
2015 -2.57% 1.23%
2014 13.03% 7.0%
2013 34.5% -3.44%
2012 17.13% 7.02%
2011 -1.67% 10.62%
2010 25.25% 9.55%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% respectively.

The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

IWR vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $39,751 14.15%
BIV $10,000 $17,492 5.31%

A $10,000 investment in IWR would have resulted in a final balance of $39,751. This is a profit of $29,751 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.

IWR’s CAGR is 8.84 percentage points higher than that of BIV and as a result, would have yielded $22,259 more on a $10,000 investment. Thus, IWR outperformed BIV by 8.84% annually.


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