The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. VCIT is a Vanguard Corporate Bond fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between VCIT and IWP? And which fund is better?
The expense ratio of VCIT is 0.19 percentage points lower than IWP’s (0.05% vs. 0.24%). VCIT is mostly comprised of BBB bonds while IWP has a high exposure to the technology sector. Overall, VCIT has provided lower returns than IWP over the past ten years.
In this article, we’ll compare VCIT vs. IWP. We’ll look at portfolio growth and performance, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss VCIT’s and IWP’s holdings, risk metrics, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares||iShares Russell Mid-Cap Growth ETF|
|Category||Corporate Bond||Mid-Cap Growth|
The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) is a Corporate Bond fund that is issued by Vanguard. It currently has 48.39B total assets under management and has yielded an average annual return of 5.84% over the past 10 years. The fund has a dividend yield of 2.33% with an expense ratio of 0.05%.
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%.
VCIT’s dividend yield is 2.07% higher than that of IWP (2.33% vs. 0.26%). Also, VCIT yielded on average 10.91% less per year over the past decade (5.84% vs. 16.75%). The expense ratio of VCIT is 0.19 percentage points lower than IWP’s (0.05% vs. 0.24%).
|VCIT Bond Sectors||Weight|
VCIT’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 55.28%, 37.85%, 5.22%, 1.57%, and 0.08%. The fund is less weighted towards Others (0.0%), B (0.0%), and BB (0.0%) rated bonds.
|IDEXX Laboratories Inc||1.3%|
|Roku Inc Class A||1.29%|
|Match Group Inc||1.06%|
|Chipotle Mexican Grill Inc||1.06%|
|Veeva Systems Inc Class A||1.04%|
|Palantir Technologies Inc Ordinary Shares – Class A||1.04%|
|Lululemon Athletica Inc||1.01%|
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%.
The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) has a Standard Deviation of 5.08 with a Beta of 1.35 and a R-squared of 63.18. Its Treynor Ratio is 3.43 while VCIT’s Mean Return is 0.44. Furthermore, the fund has a Alpha of 0.89 and a Sharpe Ratio of 0.91.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Standard Deviation of 16.05 with a Beta of 1.1 and a Alpha of -1.03. Its Mean Return is 1.27 while IWP’s Sharpe Ratio is 0.91. Furthermore, the fund has a R-squared of 87.01 and a Treynor Ratio of 12.98.
VCIT’s Mean Return is 0.83 points lower than that of IWP and its R-squared is 23.83 points lower. With a Standard Deviation of 5.08, VCIT is slightly less volatile than IWP. The Alpha and Beta of VCIT are 1.92 points higher and 0.25 points higher than IWP’s Alpha and Beta.
VCIT had its best year in 2019 with an annual return of 13.97%. VCIT’s worst year over the past decade yielded -1.8% and occurred in 2013. In most years the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares provided moderate returns such as in 2017, 2014, and 2011 where annual returns amounted to 5.5%, 7.47%, and 7.94% respectively.
The year 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VCIT would have resulted in a final balance of $17,439. This is a profit of $7,439 over 10 years and amounts to a compound annual growth rate (CAGR) of 5.84%.
With a $10,000 investment in IWP, the end total would have been $39,802. This equates to a $29,802 profit over 10 years and a compound annual growth rate (CAGR) of 16.75%.
VCIT’s CAGR is 10.91 percentage points lower than that of IWP and as a result, would have yielded $22,363 less on a $10,000 investment. Thus, VCIT performed worse than IWP by 10.91% annually.
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