VOO vs. IVW: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares S&P 500 Growth ETF (IVW) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and IVW is a iShares Large Growth fund. So, what’s the difference between VOO and IVW? And which fund is better?

The expense ratio of VOO is 0.15 percentage points lower than IVW’s (0.03% vs. 0.18%). VOO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VOO has provided lower returns than IVW over the past ten years.

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

Summary

VOO IVW
Name Vanguard S&P 500 ETF iShares S&P 500 Growth ETF
Category Large Blend Large Growth
Issuer Vanguard iShares
AUM 753.41B 35.72B
Avg. Return 14.45% 16.74%
Div. Yield 1.34% 0.61%
Expense Ratio 0.03% 0.18%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

VOO’s dividend yield is 0.73% higher than that of IVW (1.34% vs. 0.61%). Also, VOO yielded on average 2.29% less per year over the past decade (14.45% vs. 16.74%). The expense ratio of VOO is 0.15 percentage points lower than IVW’s (0.03% vs. 0.18%).

Fund Composition

Industry Exposure

VOO vs. IVW - Industry Exposure

VOO IVW
Technology 24.24% 37.8%
Industrials 8.86% 5.72%
Energy 2.84% 0.06%
Communication Services 11.14% 15.44%
Utilities 2.43% 0.47%
Healthcare 13.1% 11.88%
Consumer Defensive 6.32% 3.84%
Real Estate 2.58% 1.11%
Financial Services 14.2% 6.78%
Consumer Cyclical 12.01% 15.25%
Basic Materials 2.27% 1.65%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

VOO is 13.56% less exposed to the Technology sector than IVW (24.24% vs 37.8%). VOO’s exposure to Financial Services and Healthcare stocks is 7.42% higher and 1.22% higher respectively (14.2% vs. 6.78% and 13.1% vs. 11.88%). In total, Utilities, Real Estate, and Energy also make up 6.21% more of the fund’s holdings compared to IVW (7.85% vs. 1.64%).

Holdings

VOO - Holdings

VOO Holdings Weight
Apple Inc 5.92%
Microsoft Corp 5.62%
Amazon.com Inc 4.06%
Facebook Inc Class A 2.29%
Alphabet Inc Class A 2.02%
Alphabet Inc Class C 1.97%
Tesla Inc 1.44%
Berkshire Hathaway Inc Class B 1.44%
NVIDIA Corp 1.37%
JPMorgan Chase & Co 1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

Performance

Annual Returns

VOO vs. IVW - Annual Returns

Year VOO IVW
2020 18.35% 33.21%
2019 31.46% 30.91%
2018 -4.42% -0.17%
2017 21.78% 27.2%
2016 11.93% 6.74%
2015 1.35% 5.33%
2014 13.63% 14.67%
2013 32.33% 32.48%
2012 15.98% 14.39%
2011 2.09% 4.49%
2010 0.0% 14.84%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2020 was the strongest year for IVW, returning 33.21% on an annual basis. The poorest year for IVW in the last ten years was 2018, with a yield of -0.17%. Most years the iShares S&P 500 Growth ETF has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 14.39%, 14.67%, and 14.84% respectively.

Portfolio Growth

VOO vs. IVW - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
IVW $10,000 $45,206 16.74%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in IVW, the end total would have been $45,206. This equates to a $35,206 profit over 10 years and a compound annual growth rate (CAGR) of 16.74%.

VOO’s CAGR is 2.29 percentage points lower than that of IVW and as a result, would have yielded $8,631 less on a $10,000 investment. Thus, VOO performed worse than IVW by 2.29% 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) 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!

2) 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!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply