IWR vs. VOE: Fund Composition, Risk Analysis & Performance

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

The expense ratio of IWR is 0.12 percentage points higher than VOE’s (0.19% vs. 0.07%). IWR also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWR has provided higher returns than VOE over the past ten years.

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

Summary

IWR VOE
Name iShares Russell Mid-Cap ETF Vanguard Mid-Cap Value Index Fund ETF Shares
Category Mid-Cap Blend Mid-Cap Value
Issuer iShares Vanguard
AUM 29.84B 26.78B
Avg. Return 14.15% 12.52%
Div. Yield 0.99% 1.87%
Expense Ratio 0.19% 0.07%

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 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%.

IWR’s dividend yield is 0.88% lower than that of VOE (0.99% vs. 1.87%). Also, IWR yielded on average 1.63% more per year over the past decade (14.15% vs. 12.52%). The expense ratio of IWR is 0.12 percentage points higher than VOE’s (0.19% vs. 0.07%).

Fund Composition

Industry Exposure

IWR vs. VOE - Industry Exposure

IWR VOE
Technology 19.67% 9.85%
Industrials 14.54% 9.4%
Energy 3.48% 5.69%
Communication Services 4.64% 5.27%
Utilities 4.46% 10.93%
Healthcare 11.76% 7.04%
Consumer Defensive 3.82% 4.85%
Real Estate 8.31% 11.48%
Financial Services 11.64% 18.26%
Consumer Cyclical 13.59% 11.8%
Basic Materials 4.1% 5.44%

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

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%.

IWR is 9.82% more exposed to the Technology sector than VOE (19.67% vs 9.85%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 5.14% higher and 1.79% higher respectively (14.54% vs. 9.4% and 13.59% vs. 11.8%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 8.84% less of the fund’s holdings compared to VOE (12.38% vs. 21.22%).

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%.

VOE - Holdings

VOE Holdings Weight
Carrier Global Corp Ordinary Shares 1.28%
International Flavors & Fragrances Inc 1.13%
Motorola Solutions Inc 1.12%
Discover Financial Services 1.09%
Welltower Inc 1.05%
Corteva Inc 0.99%
Valero Energy Corp 0.97%
Corning Inc 0.95%
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%.

Risk Analysis

IWR VOE
Mean Return 1.17 1.05
R-squared 91.52 88.76
Std. Deviation 15.66 15.98
Alpha -2.8 -3.77
Beta 1.11 1.11
Sharpe Ratio 0.86 0.75
Treynor Ratio 11.72 10.19

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

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Beta of 1.11 with a Standard Deviation of 15.98 and a Treynor Ratio of 10.19. Its R-squared is 88.76 while VOE’s Alpha is -3.77. Furthermore, the fund has a Mean Return of 1.05 and a Sharpe Ratio of 0.75.

IWR’s Mean Return is 0.12 points higher than that of VOE and its R-squared is 2.76 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than VOE. The Alpha and Beta of IWR are 0.97 points higher and 0.00 points lower than VOE’s Alpha and Beta.

Performance

Annual Returns

IWR vs. VOE - Annual Returns

Year IWR VOE
2020 16.91% 2.5%
2019 30.31% 27.98%
2018 -9.13% -12.41%
2017 18.32% 17.05%
2016 13.58% 15.26%
2015 -2.57% -1.8%
2014 13.03% 13.98%
2013 34.5% 37.65%
2012 17.13% 16.04%
2011 -1.67% -0.32%
2010 25.25% 21.83%

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 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.

Portfolio Growth

IWR vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $39,751 14.15%
VOE $10,000 $33,655 12.52%

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 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%.

IWR’s CAGR is 1.63 percentage points higher than that of VOE and as a result, would have yielded $6,096 more on a $10,000 investment. Thus, IWR outperformed VOE by 1.63% annually.


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