The iShares Russell Mid-Cap ETF (IWR) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between IWR and VXF? And which fund is better?
The expense ratio of IWR is 0.13 percentage points higher than VXF’s (0.19% vs. 0.06%). IWR also has a lower exposure to the technology sector and a lower standard deviation. Overall, IWR has provided lower returns than VXF over the past ten years.
In this article, we’ll compare IWR vs. VXF. We’ll look at portfolio growth and annual returns, as well as at their performance and risk metrics. Moreover, I’ll also discuss IWR’s and VXF’s industry exposure, holdings, and fund composition and examine how these affect their overall returns.
Summary
| IWR | VXF | |
| Name | iShares Russell Mid-Cap ETF | Vanguard Extended Market Index Fund ETF Shares |
| Category | Mid-Cap Blend | Mid-Cap Growth |
| Issuer | iShares | Vanguard |
| AUM | 29.84B | 114.53B |
| Avg. Return | 14.15% | 15.47% |
| Div. Yield | 0.99% | 1.19% |
| Expense Ratio | 0.19% | 0.06% |
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 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%.
IWR’s dividend yield is 0.20% lower than that of VXF (0.99% vs. 1.19%). Also, IWR yielded on average 1.32% less per year over the past decade (14.15% vs. 15.47%). The expense ratio of IWR is 0.13 percentage points higher than VXF’s (0.19% vs. 0.06%).
Fund Composition
Industry Exposure
| IWR | VXF | |
| Technology | 19.67% | 23.61% |
| Industrials | 14.54% | 11.31% |
| Energy | 3.48% | 2.46% |
| Communication Services | 4.64% | 7.29% |
| Utilities | 4.46% | 1.65% |
| Healthcare | 11.76% | 15.25% |
| Consumer Defensive | 3.82% | 3.09% |
| Real Estate | 8.31% | 8.16% |
| Financial Services | 11.64% | 12.56% |
| Consumer Cyclical | 13.59% | 11.35% |
| Basic Materials | 4.1% | 3.26% |
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 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%.
IWR is 3.94% less exposed to the Technology sector than VXF (19.67% vs 23.61%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 3.23% higher and 2.24% higher respectively (14.54% vs. 11.31% and 13.59% vs. 11.35%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 4.38% more of the fund’s holdings compared to VXF (12.38% vs. 8.00%).
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%.
| 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
| IWR | VXF | |
| Mean Return | 1.17 | 1.24 |
| R-squared | 91.52 | 85.73 |
| Std. Deviation | 15.66 | 18.04 |
| Alpha | -2.8 | -3.26 |
| Beta | 1.11 | 1.23 |
| Sharpe Ratio | 0.86 | 0.79 |
| Treynor Ratio | 11.72 | 10.92 |
The iShares Russell Mid-Cap ETF (IWR) has a Standard Deviation of 15.66 with a Beta of 1.11 and a Treynor Ratio of 11.72. Its Mean Return is 1.17 while IWR’s R-squared is 91.52. Furthermore, the fund has a Sharpe Ratio of 0.86 and a Alpha of -2.8.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a R-squared of 85.73 with a Sharpe Ratio of 0.79 and a Beta of 1.23. Its Mean Return is 1.24 while VXF’s Standard Deviation is 18.04. Furthermore, the fund has a Alpha of -3.26 and a Treynor Ratio of 10.92.
IWR’s Mean Return is 0.07 points lower than that of VXF and its R-squared is 5.79 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than VXF. The Alpha and Beta of IWR are 0.46 points higher and 0.12 points lower than VXF’s Alpha and Beta.
Performance
Annual Returns
| Year | IWR | VXF |
| 2020 | 16.91% | 32.19% |
| 2019 | 30.31% | 28.04% |
| 2018 | -9.13% | -9.37% |
| 2017 | 18.32% | 18.1% |
| 2016 | 13.58% | 16.16% |
| 2015 | -2.57% | -3.26% |
| 2014 | 13.03% | 7.55% |
| 2013 | 34.5% | 38.37% |
| 2012 | 17.13% | 18.48% |
| 2011 | -1.67% | -3.61% |
| 2010 | 25.25% | 27.55% |
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 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 |
| IWR | $10,000 | $39,751 | 14.15% |
| VXF | $10,000 | $44,130 | 15.47% |
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 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%.
IWR’s CAGR is 1.32 percentage points lower than that of VXF and as a result, would have yielded $4,379 less on a $10,000 investment. Thus, IWR performed worse than VXF by 1.32% annually.
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