Skip to content

VGT vs. IWR: What’s The Difference?

The Vanguard Information Technology Index Fund ETF Shares (VGT) and the iShares Russell Mid-Cap ETF (IWR) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and IWR is a iShares Mid-Cap Blend fund. So, what’s the difference between VGT and IWR? And which fund is better?

The expense ratio of VGT is 0.09 percentage points lower than IWR’s (0.1% vs. 0.19%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than IWR over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VGTIWR
NameVanguard Information Technology Index Fund ETF SharesiShares Russell Mid-Cap ETF
CategoryTechnologyMid-Cap Blend
IssuerVanguardiShares
AUM54.13B29.84B
Avg. Return20.84%14.15%
Div. Yield0.66%0.99%
Expense Ratio0.1%0.19%

The Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.

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%.

VGT’s dividend yield is 0.33% lower than that of IWR (0.66% vs. 0.99%). Also, VGT yielded on average 6.68% more per year over the past decade (20.84% vs. 14.15%). The expense ratio of VGT is 0.09 percentage points lower than IWR’s (0.1% vs. 0.19%).

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).

Fund Composition

Industry Exposure

VGT vs. IWR - Industry Exposure

VGTIWR
Technology88.89%19.67%
Industrials1.67%14.54%
Energy0.0%3.48%
Communication Services0.61%4.64%
Utilities0.0%4.46%
Healthcare0.0%11.76%
Consumer Defensive0.0%3.82%
Real Estate0.0%8.31%
Financial Services8.83%11.64%
Consumer Cyclical0.0%13.59%
Basic Materials0.0%4.1%

The Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.

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%.

VGT is 69.22% more exposed to the Technology sector than IWR (88.89% vs 19.67%). VGT’s exposure to Financial Services and Industrials stocks is 2.81% lower and 12.87% lower respectively (8.83% vs. 11.64% and 1.67% vs. 14.54%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 25.72% less of the fund’s holdings compared to IWR (0.00% vs. 25.72%).

Holdings

VGT - Holdings

VGT HoldingsWeight
Apple Inc19.58%
Microsoft Corp16.53%
NVIDIA Corp4.22%
Visa Inc Class A3.16%
PayPal Holdings Inc2.76%
Mastercard Inc Class A2.76%
Adobe Inc2.39%
Intel Corp1.94%
Salesforce.com Inc1.91%
Cisco Systems Inc1.9%

VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.

Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.

IWR - Holdings

IWR HoldingsWeight
IDEXX Laboratories Inc0.51%
DocuSign Inc0.51%
Twitter Inc0.48%
Chipotle Mexican Grill Inc0.47%
Roku Inc Class A0.44%
Marvell Technology Inc0.44%
DexCom Inc0.44%
Trane Technologies PLC0.43%
MSCI Inc0.43%
Carrier Global Corp Ordinary Shares0.43%

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%.

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).

Risk Analysis

VGTIWR
Mean Return1.761.17
R-squared74.8491.52
Std. Deviation16.6115.66
Alpha10.41-2.8
Beta1.021.11
Sharpe Ratio1.230.86
Treynor Ratio20.5511.72

The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Treynor Ratio of 20.55 with a R-squared of 74.84 and a Beta of 1.02. Its Sharpe Ratio is 1.23 while VGT’s Alpha is 10.41. Furthermore, the fund has a Standard Deviation of 16.61 and a Mean Return of 1.76.

The iShares Russell Mid-Cap ETF (IWR) has a Beta of 1.11 with a Mean Return of 1.17 and a Treynor Ratio of 11.72. Its Standard Deviation is 15.66 while IWR’s Alpha is -2.8. Furthermore, the fund has a R-squared of 91.52 and a Sharpe Ratio of 0.86.

VGT’s Mean Return is 0.59 points higher than that of IWR and its R-squared is 16.68 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than IWR. The Alpha and Beta of VGT are 13.21 points higher and 0.09 points lower than IWR’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!

Performance

Annual Returns

VGT vs. IWR - Annual Returns

YearVGTIWR
202045.94%16.91%
201948.68%30.31%
20182.52%-9.13%
201737.07%18.32%
201613.73%13.58%
20155.02%-2.57%
201418.01%13.03%
201330.91%34.5%
201214.05%17.13%
20110.52%-1.67%
201012.74%25.25%

VGT had its best year in 2019 with an annual return of 48.68%. VGT’s worst year over the past decade yielded 0.52% and occurred in 2011. In most years the Vanguard Information Technology Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 13.73%, 14.05%, and 18.01% respectively.

The year 2013 was the strongest year for IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% respectively.

Portfolio Growth

VGT vs. IWR - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VGT$10,000$72,71820.84%
IWR$10,000$39,75114.15%

A $10,000 investment in VGT would have resulted in a final balance of $72,718. This is a profit of $62,718 over 11 years and amounts to a compound annual growth rate (CAGR) of 20.84%.

With a $10,000 investment in IWR, the end total would have been $39,751. This equates to a $29,751 profit over 11 years and a compound annual growth rate (CAGR) of 14.15%.

VGT’s CAGR is 6.68 percentage points higher than that of IWR and as a result, would have yielded $32,967 more on a $10,000 investment. Thus, VGT outperformed IWR by 6.68% annually.


Current recommendations:

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.

Leave a Reply

Your email address will not be published.