The iShares Russell Mid-Cap ETF (IWR) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between IWR and VT? And which fund is better?
The expense ratio of IWR is 0.11 percentage points higher than VT’s (0.19% vs. 0.08%). IWR also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWR has provided higher returns than VT over the past ten years.
In this article, we’ll compare IWR vs. VT. We’ll look at risk metrics and performance, as well as at their fund composition and portfolio growth. Moreover, I’ll also discuss IWR’s and VT’s industry exposure, annual returns, and holdings and examine how these affect their overall returns.
|Name||iShares Russell Mid-Cap ETF||Vanguard Total World Stock Index Fund ETF Shares|
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
IWR’s dividend yield is 0.66% lower than that of VT (0.99% vs. 1.65%). Also, IWR yielded on average 3.74% more per year over the past decade (14.15% vs. 10.42%). The expense ratio of IWR is 0.11 percentage points higher than VT’s (0.19% vs. 0.08%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
IWR is 0.04% more exposed to the Technology sector than VT (19.67% vs 19.63%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 3.84% higher and 1.27% higher respectively (14.54% vs. 10.7% and 13.59% vs. 12.32%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 1.90% less of the fund’s holdings compared to VT (12.38% vs. 14.28%).
|IDEXX Laboratories Inc||0.51%|
|Chipotle Mexican Grill Inc||0.47%|
|Roku Inc Class A||0.44%|
|Marvell Technology Inc||0.44%|
|Trane Technologies PLC||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%.
|Facebook Inc Class A||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The iShares Russell Mid-Cap ETF (IWR) has a Sharpe Ratio of 0.86 with a Standard Deviation of 15.66 and a R-squared of 91.52. Its Beta is 1.11 while IWR’s Treynor Ratio is 11.72. Furthermore, the fund has a Alpha of -2.8 and a Mean Return of 1.17.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Standard Deviation of 14.19 with a Beta of 1.01 and a Mean Return of 0.9. Its Sharpe Ratio is 0.71 while VT’s Alpha is 0.2. Furthermore, the fund has a Treynor Ratio of 9.5 and a R-squared of 99.35.
IWR’s Mean Return is 0.27 points higher than that of VT and its R-squared is 7.83 points lower. With a Standard Deviation of 15.66, IWR is slightly more volatile than VT. The Alpha and Beta of IWR are 3.00 points lower and 0.10 points higher than VT’s Alpha and Beta.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
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 2019 was the strongest year for VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
IWR’s CAGR is 3.74 percentage points higher than that of VT and as a result, would have yielded $12,012 more on a $10,000 investment. Thus, IWR outperformed VT by 3.74% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.