The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. VOE is a Vanguard Mid-Cap Value fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between VOE and IWS? And which fund is better?
The expense ratio of VOE is 0.16 percentage points lower than IWS’s (0.07% vs. 0.23%). VOE also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VOE has provided higher returns than IWS over the past 11 years.
In this article, we’ll compare VOE vs. IWS. We’ll look at performance and annual returns, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss VOE’s and IWS’s portfolio growth, risk metrics, and holdings and examine how these affect their overall returns.
Summary
| VOE | IWS | |
| Name | Vanguard Mid-Cap Value Index Fund ETF Shares | iShares Russell Mid-Cap Value ETF |
| Category | Mid-Cap Value | Mid-Cap Value |
| Issuer | Vanguard | iShares |
| AUM | 26.78B | 14.24B |
| Avg. Return | 12.52% | 12.35% |
| Div. Yield | 1.87% | 1.34% |
| Expense Ratio | 0.07% | 0.23% |
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
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%.
VOE’s dividend yield is 0.53% higher than that of IWS (1.87% vs. 1.34%). Also, VOE yielded on average 0.18% more per year over the past decade (12.52% vs. 12.35%). The expense ratio of VOE is 0.16 percentage points lower than IWS’s (0.07% vs. 0.23%).
Fund Composition
Industry Exposure
| VOE | IWS | |
| Technology | 9.85% | 11.39% |
| Industrials | 9.4% | 14.6% |
| Energy | 5.69% | 4.71% |
| Communication Services | 5.27% | 4.08% |
| Utilities | 10.93% | 6.97% |
| Healthcare | 7.04% | 8.56% |
| Consumer Defensive | 4.85% | 4.76% |
| Real Estate | 11.48% | 11.71% |
| Financial Services | 18.26% | 15.75% |
| Consumer Cyclical | 11.8% | 12.07% |
| Basic Materials | 5.44% | 5.4% |
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
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%.
VOE is 2.51% more exposed to the Financial Services sector than IWS (18.26% vs 15.75%). VOE’s exposure to Consumer Cyclical and Real Estate stocks is 0.27% lower and 0.23% lower respectively (11.8% vs. 12.07% and 11.48% vs. 11.71%). In total, Communication Services, Basic Materials, and Energy also make up 2.21% more of the fund’s holdings compared to IWS (16.40% vs. 14.19%).
Holdings
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
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%.
Risk Analysis
| VOE | IWS | |
| Mean Return | 1.05 | 1.06 |
| R-squared | 88.76 | 87.04 |
| Std. Deviation | 15.98 | 16.03 |
| Alpha | -3.77 | -4.11 |
| Beta | 1.11 | 1.1 |
| Sharpe Ratio | 0.75 | 0.75 |
| Treynor Ratio | 10.19 | 10.3 |
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Alpha of -3.77 with a Sharpe Ratio of 0.75 and a Beta of 1.11. Its Mean Return is 1.05 while VOE’s R-squared is 88.76. Furthermore, the fund has a Standard Deviation of 15.98 and a Treynor Ratio of 10.19.
The iShares Russell Mid-Cap Value ETF (IWS) has a Sharpe Ratio of 0.75 with a Mean Return of 1.06 and a Treynor Ratio of 10.3. Its R-squared is 87.04 while IWS’s Standard Deviation is 16.03. Furthermore, the fund has a Beta of 1.1 and a Alpha of -4.11.
VOE’s Mean Return is 0.01 points lower than that of IWS and its R-squared is 1.72 points higher. With a Standard Deviation of 15.98, VOE is slightly less volatile than IWS. The Alpha and Beta of VOE are 0.34 points higher and 0.01 points higher than IWS’s Alpha and Beta.
Performance
Annual Returns
| Year | VOE | IWS |
| 2020 | 2.5% | 4.76% |
| 2019 | 27.98% | 26.78% |
| 2018 | -12.41% | -12.36% |
| 2017 | 17.05% | 13.1% |
| 2016 | 15.26% | 19.69% |
| 2015 | -1.8% | -4.93% |
| 2014 | 13.98% | 14.49% |
| 2013 | 37.65% | 33.11% |
| 2012 | 16.04% | 18.27% |
| 2011 | -0.32% | -1.55% |
| 2010 | 21.83% | 24.46% |
VOE had its best year in 2013 with an annual return of 37.65%. VOE’s worst year over the past decade yielded -12.41% and occurred in 2018. In most years the Vanguard Mid-Cap Value Index Fund ETF Shares provided moderate returns such as in 2014, 2016, and 2012 where annual returns amounted to 13.98%, 15.26%, and 16.04% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VOE | $10,000 | $33,655 | 12.52% |
| IWS | $10,000 | $33,083 | 12.35% |
A $10,000 investment in VOE would have resulted in a final balance of $33,655. This is a profit of $23,655 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.52%.
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%.
VOE’s CAGR is 0.18 percentage points higher than that of IWS and as a result, would have yielded $572 more on a $10,000 investment. Thus, VOE outperformed IWS by 0.18% annually.
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