VOO vs. IWB: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares Russell 1000 ETF (IWB) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and IWB is a iShares Large Blend fund. So, what’s the difference between VOO and IWB? And which fund is better?

The expense ratio of VOO is 0.12 percentage points lower than IWB’s (0.03% vs. 0.15%). VOO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VOO has provided lower returns than IWB over the past ten years.

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

Summary

VOO IWB
Name Vanguard S&P 500 ETF iShares Russell 1000 ETF
Category Large Blend Large Blend
Issuer Vanguard iShares
AUM 753.41B 30.54B
Avg. Return 14.45% 14.64%
Div. Yield 1.34% 1.14%
Expense Ratio 0.03% 0.15%

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 Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

VOO’s dividend yield is 0.20% higher than that of IWB (1.34% vs. 1.14%). Also, VOO yielded on average 0.19% less per year over the past decade (14.45% vs. 14.64%). The expense ratio of VOO is 0.12 percentage points lower than IWB’s (0.03% vs. 0.15%).

Fund Composition

Industry Exposure

VOO vs. IWB - Industry Exposure

VOO IWB
Technology 24.24% 25.33%
Industrials 8.86% 8.88%
Energy 2.84% 2.44%
Communication Services 11.14% 10.83%
Utilities 2.43% 2.36%
Healthcare 13.1% 13.35%
Consumer Defensive 6.32% 5.97%
Real Estate 2.58% 3.34%
Financial Services 14.2% 13.64%
Consumer Cyclical 12.01% 11.85%
Basic Materials 2.27% 2.02%

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 Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

VOO is 1.09% less exposed to the Technology sector than IWB (24.24% vs 25.33%). VOO’s exposure to Financial Services and Healthcare stocks is 0.56% higher and 0.25% lower respectively (14.2% vs. 13.64% and 13.1% vs. 13.35%). In total, Utilities, Real Estate, and Energy also make up 0.29% less of the fund’s holdings compared to IWB (7.85% vs. 8.14%).

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%.

IWB - Holdings

IWB Holdings Weight
Apple Inc 5.45%
Microsoft Corp 5.11%
Amazon.com Inc 3.43%
Facebook Inc Class A 2.03%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.82%
Tesla Inc 1.27%
Berkshire Hathaway Inc Class B 1.24%
NVIDIA Corp 1.11%
JPMorgan Chase & Co 1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

Performance

Annual Returns

VOO vs. IWB - Annual Returns

Year VOO IWB
2020 18.35% 20.8%
2019 31.46% 31.26%
2018 -4.42% -4.91%
2017 21.78% 21.53%
2016 11.93% 11.91%
2015 1.35% 0.82%
2014 13.63% 13.08%
2013 32.33% 32.93%
2012 15.98% 16.27%
2011 2.09% 1.36%
2010 0.0% 15.94%

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 2013 was the strongest year for IWB, returning 32.93% on an annual basis. The poorest year for IWB in the last ten years was 2018, with a yield of -4.91%. Most years the iShares Russell 1000 ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.08%, 15.94%, and 16.27% respectively.

Portfolio Growth

VOO vs. IWB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
IWB $10,000 $36,624 14.64%

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 IWB, the end total would have been $36,624. This equates to a $26,624 profit over 10 years and a compound annual growth rate (CAGR) of 14.64%.

VOO’s CAGR is 0.19 percentage points lower than that of IWB and as a result, would have yielded $49 less on a $10,000 investment. Thus, VOO performed worse than IWB by 0.19% annually.


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