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VEU vs. IWP: What’s The Difference?

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. VEU is a Vanguard Foreign Large Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between VEU and IWP? And which fund is better?

The expense ratio of VEU is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%). VEU also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VEU has provided lower returns than IWP over the past ten years.

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

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Summary

VEUIWP
NameVanguard FTSE All-World ex-US Index Fund ETF SharesiShares Russell Mid-Cap Growth ETF
CategoryForeign Large BlendMid-Cap Growth
IssuerVanguardiShares
AUM53.64B15.7B
Avg. Return6.64%16.75%
Div. Yield2.31%0.26%
Expense Ratio0.08%0.24%

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 0.08%.

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%.

VEU’s dividend yield is 2.05% higher than that of IWP (2.31% vs. 0.26%). Also, VEU yielded on average 10.11% less per year over the past decade (6.64% vs. 16.75%). The expense ratio of VEU is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%).

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Fund Composition

Industry Exposure

VEU vs. IWP - Industry Exposure

VEUIWP
Technology12.94%33.88%
Industrials12.19%14.09%
Energy4.69%1.51%
Communication Services7.44%6.32%
Utilities2.89%0.16%
Healthcare9.34%16.79%
Consumer Defensive8.28%2.32%
Real Estate3.04%2.46%
Financial Services18.46%4.52%
Consumer Cyclical12.57%16.09%
Basic Materials8.17%1.86%

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has the most exposure to the Financial Services sector at 18.46%. This is followed by Technology and Consumer Cyclical at 12.94% and 12.57% respectively. Real Estate (3.04%), Energy (4.69%), and Communication Services (7.44%) only make up 15.17% of the fund’s total assets.

VEU’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Industrials, and Consumer Cyclical stocks at 8.17%, 8.28%, 9.34%, 12.19%, and 12.57%.

The iShares Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

VEU is 13.94% more exposed to the Financial Services sector than IWP (18.46% vs 4.52%). VEU’s exposure to Technology and Consumer Cyclical stocks is 20.94% lower and 3.52% lower respectively (12.94% vs. 33.88% and 12.57% vs. 16.09%). In total, Real Estate, Energy, and Communication Services also make up 4.88% more of the fund’s holdings compared to IWP (15.17% vs. 10.29%).

Holdings

VEU - Holdings

VEU HoldingsWeight
Tencent Holdings Ltd1.57%
Alibaba Group Holding Ltd Ordinary Shares1.4%
Nestle SA1.22%
Taiwan Semiconductor Manufacturing Co Ltd0.98%
ASML Holding NV0.95%
Taiwan Semiconductor Manufacturing Co Ltd ADR0.91%
Roche Holding AG0.91%
Toyota Motor Corp0.75%
LVMH Moet Hennessy Louis Vuitton SE0.68%
Novartis AG0.67%

VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.

Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.

IWP - Holdings

IWP HoldingsWeight
IDEXX Laboratories Inc1.3%
DocuSign Inc1.3%
Roku Inc Class A1.29%
Match Group Inc1.06%
Chipotle Mexican Grill Inc1.06%
Pinterest Inc1.05%
Veeva Systems Inc Class A1.04%
Palantir Technologies Inc Ordinary Shares – Class A1.04%
Lululemon Athletica Inc1.01%
DexCom Inc1.0%

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%.

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Risk Analysis

VEUIWP
Mean Return0.561.27
R-squared98.4487.01
Std. Deviation15.0816.05
Alpha0.28-1.03
Beta0.991.1
Sharpe Ratio0.40.91
Treynor Ratio5.1212.98

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a Mean Return of 0.56 with a R-squared of 98.44 and a Sharpe Ratio of 0.4. Its Standard Deviation is 15.08 while VEU’s Beta is 0.99. Furthermore, the fund has a Alpha of 0.28 and a Treynor Ratio of 5.12.

The iShares Russell Mid-Cap Growth ETF (IWP) has a Mean Return of 1.27 with a Alpha of -1.03 and a Standard Deviation of 16.05. Its Beta is 1.1 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.

VEU’s Mean Return is 0.71 points lower than that of IWP and its R-squared is 11.43 points higher. With a Standard Deviation of 15.08, VEU is slightly less volatile than IWP. The Alpha and Beta of VEU are 1.31 points higher and 0.11 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

VEU vs. IWP - Annual Returns

YearVEUIWP
202011.39%35.29%
201921.63%35.14%
2018-13.97%-4.95%
201727.27%24.98%
20164.77%7.15%
2015-4.67%-0.39%
2014-4.05%11.68%
201314.5%35.44%
201218.55%15.62%
2011-14.25%-1.82%
201011.85%26.1%

VEU had its best year in 2017 with an annual return of 27.27%. VEU’s worst year over the past decade yielded -14.25% and occurred in 2011. In most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares provided moderate returns such as in 2016, 2020, and 2010 where annual returns amounted to 4.77%, 11.39%, and 11.85% 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.

Portfolio Growth

VEU vs. IWP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VEU$10,000$18,5076.64%
IWP$10,000$50,19116.75%

A $10,000 investment in VEU would have resulted in a final balance of $18,507. This is a profit of $8,507 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.64%.

With a $10,000 investment in IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.

VEU’s CAGR is 10.11 percentage points lower than that of IWP and as a result, would have yielded $31,684 less on a $10,000 investment. Thus, VEU performed worse than IWP by 10.11% annually.


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