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

The expense ratio of VEA is 0.18 percentage points lower than IWS’s (0.05% vs. 0.23%). VEA also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VEA has provided lower returns than IWS over the past ten years.

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

Summary

VEAIWS
NameVanguard FTSE Developed Markets Index Fund ETF SharesiShares Russell Mid-Cap Value ETF
CategoryForeign Large BlendMid-Cap Value
IssuerVanguardiShares
AUM157.48B14.24B
Avg. Return7.05%12.35%
Div. Yield2.49%1.34%
Expense Ratio0.05%0.23%

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 157.48B total assets under management and has yielded an average annual return of 7.05% over the past 10 years. The fund has a dividend yield of 2.49% with an expense ratio of 0.05%.

The iShares Russell Mid-Cap Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

VEA’s dividend yield is 1.15% higher than that of IWS (2.49% vs. 1.34%). Also, VEA yielded on average 5.30% less per year over the past decade (7.05% vs. 12.35%). The expense ratio of VEA is 0.18 percentage points lower than IWS’s (0.05% vs. 0.23%).

Fund Composition

Industry Exposure

VEA vs. IWS - Industry Exposure

VEAIWS
Technology11.67%11.39%
Industrials15.47%14.6%
Energy4.17%4.71%
Communication Services5.41%4.08%
Utilities3.1%6.97%
Healthcare10.6%8.56%
Consumer Defensive8.61%4.76%
Real Estate4.04%11.71%
Financial Services17.39%15.75%
Consumer Cyclical11.31%12.07%
Basic Materials8.24%5.4%

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) has the most exposure to the Financial Services sector at 17.39%. This is followed by Industrials and Technology at 15.47% and 11.67% respectively. Real Estate (4.04%), Energy (4.17%), and Communication Services (5.41%) only make up 13.62% of the fund’s total assets.

VEA’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Consumer Cyclical, and Technology stocks at 8.24%, 8.61%, 10.6%, 11.31%, and 11.67%.

The iShares Russell Mid-Cap Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

VEA is 1.64% more exposed to the Financial Services sector than IWS (17.39% vs 15.75%). VEA’s exposure to Industrials and Technology stocks is 0.87% higher and 0.28% higher respectively (15.47% vs. 14.6% and 11.67% vs. 11.39%). In total, Real Estate, Energy, and Communication Services also make up 6.88% less of the fund’s holdings compared to IWS (13.62% vs. 20.50%).

Holdings

VEA - Holdings

VEA HoldingsWeight
Nestle SA1.5%
Samsung Electronics Co Ltd1.4%
ASML Holding NV1.16%
Roche Holding AG1.1%
Toyota Motor Corp0.92%
LVMH Moet Hennessy Louis Vuitton SE0.84%
Novartis AG0.82%
Shopify Inc A0.7%
AstraZeneca PLC0.67%
SAP SE0.66%

VEA’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.5%, 1.4%, 1.16%, 1.1%, and 0.92%.

LVMH Moet Hennessy Louis Vuitton SE (0.84%), Novartis AG (0.82%), and Shopify Inc A (0.7%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the VEA’s holdings at 0.67% and 0.66%.

IWS - Holdings

IWS HoldingsWeight
Twitter Inc0.69%
Marvell Technology Inc0.69%
IHS Markit Ltd0.62%
Prudential Financial Inc0.56%
Otis Worldwide Corp Ordinary Shares0.54%
International Flavors & Fragrances Inc0.53%
Xcel Energy Inc0.52%
Motorola Solutions Inc0.52%
Aptiv PLC0.52%
Aflac Inc0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

Performance

Annual Returns

VEA vs. IWS - Annual Returns

YearVEAIWS
202010.29%4.76%
201922.08%26.78%
2018-14.47%-12.36%
201726.44%13.1%
20162.51%19.69%
2015-0.21%-4.93%
2014-5.71%14.49%
201322.12%33.11%
201218.6%18.27%
2011-12.57%-1.55%
20108.47%24.46%

VEA had its best year in 2017 with an annual return of 26.44%. VEA’s worst year over the past decade yielded -14.47% and occurred in 2018. In most years the Vanguard FTSE Developed Markets Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.51%, 8.47%, and 10.29% respectively.

The year 2013 was the strongest year for IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

VEA vs. IWS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VEA$10,000$19,2907.05%
IWS$10,000$33,08312.35%

A $10,000 investment in VEA would have resulted in a final balance of $19,290. This is a profit of $9,290 over 11 years and amounts to a compound annual growth rate (CAGR) of 7.05%.

With a $10,000 investment in IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

VEA’s CAGR is 5.30 percentage points lower than that of IWS and as a result, would have yielded $13,793 less on a $10,000 investment. Thus, VEA performed worse than IWS by 5.30% annually.

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