VIG vs. IWP: What’s The Difference?

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

The expense ratio of VIG is 0.18 percentage points lower than IWP’s (0.06% vs. 0.24%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than IWP over the past ten years.

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

Summary

VIG IWP
Name Vanguard Dividend Appreciation Index Fund ETF Shares iShares Russell Mid-Cap Growth ETF
Category Large Blend Mid-Cap Growth
Issuer Vanguard iShares
AUM 71.92B 15.7B
Avg. Return 13.35% 16.75%
Div. Yield 1.56% 0.26%
Expense Ratio 0.06% 0.24%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.

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%.

VIG’s dividend yield is 1.30% higher than that of IWP (1.56% vs. 0.26%). Also, VIG yielded on average 3.40% less per year over the past decade (13.35% vs. 16.75%). The expense ratio of VIG is 0.18 percentage points lower than IWP’s (0.06% vs. 0.24%).

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Fund Composition

Industry Exposure

VIG vs. IWP - Industry Exposure

VIG IWP
Technology 14.93% 33.88%
Industrials 17.23% 14.09%
Energy 0.0% 1.51%
Communication Services 2.86% 6.32%
Utilities 2.81% 0.16%
Healthcare 15.52% 16.79%
Consumer Defensive 15.32% 2.32%
Real Estate 0.0% 2.46%
Financial Services 17.18% 4.52%
Consumer Cyclical 10.47% 16.09%
Basic Materials 3.67% 1.86%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.

VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.

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%.

VIG is 3.14% more exposed to the Industrials sector than IWP (17.23% vs 14.09%). VIG’s exposure to Financial Services and Healthcare stocks is 12.66% higher and 1.27% lower respectively (17.18% vs. 4.52% and 15.52% vs. 16.79%). In total, Energy, Utilities, and Communication Services also make up 2.32% less of the fund’s holdings compared to IWP (5.67% vs. 7.99%).

Holdings

VIG - Holdings

VIG Holdings Weight
Microsoft Corp 4.19%
JPMorgan Chase & Co 3.8%
Johnson & Johnson 3.67%
Walmart Inc 3.38%
Visa Inc Class A 3.22%
UnitedHealth Group Inc 3.22%
The Home Depot Inc 2.91%
Procter & Gamble Co 2.82%
Comcast Corp Class A 2.21%
Coca-Cola Co 1.98%

VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.

UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.

IWP - Holdings

IWP Holdings Weight
IDEXX Laboratories Inc 1.3%
DocuSign Inc 1.3%
Roku Inc Class A 1.29%
Match Group Inc 1.06%
Chipotle Mexican Grill Inc 1.06%
Pinterest Inc 1.05%
Veeva Systems Inc Class A 1.04%
Palantir Technologies Inc Ordinary Shares – Class A 1.04%
Lululemon Athletica Inc 1.01%
DexCom Inc 1.0%

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

VIG IWP
Mean Return 1.09 1.27
R-squared 92.2 87.01
Std. Deviation 12.25 16.05
Alpha 0.12 -1.03
Beta 0.86 1.1
Sharpe Ratio 1.01 0.91
Treynor Ratio 14.33 12.98

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Standard Deviation of 12.25 with a Beta of 0.86 and a Sharpe Ratio of 1.01. Its Treynor Ratio is 14.33 while VIG’s Mean Return is 1.09. Furthermore, the fund has a Alpha of 0.12 and a R-squared of 92.2.

The iShares Russell Mid-Cap Growth ETF (IWP) has a R-squared of 87.01 with a Standard Deviation of 16.05 and a Sharpe Ratio of 0.91. Its Beta is 1.1 while IWP’s Alpha is -1.03. Furthermore, the fund has a Treynor Ratio of 12.98 and a Mean Return of 1.27.

VIG’s Mean Return is 0.18 points lower than that of IWP and its R-squared is 5.19 points higher. With a Standard Deviation of 12.25, VIG is slightly less volatile than IWP. The Alpha and Beta of VIG are 1.15 points higher and 0.24 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. IWP - Annual Returns

Year VIG IWP
2020 15.46% 35.29%
2019 29.71% 35.14%
2018 -2.02% -4.95%
2017 22.22% 24.98%
2016 11.84% 7.15%
2015 -1.95% -0.39%
2014 10.06% 11.68%
2013 28.99% 35.44%
2012 11.61% 15.62%
2011 6.21% -1.82%
2010 14.67% 26.1%

VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% 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

VIG vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $37,951 13.35%
IWP $10,000 $50,191 16.75%

A $10,000 investment in VIG would have resulted in a final balance of $37,951. This is a profit of $27,951 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

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%.

VIG’s CAGR is 3.40 percentage points lower than that of IWP and as a result, would have yielded $12,240 less on a $10,000 investment. Thus, VIG performed worse than IWP by 3.40% annually.


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