VOO vs. IWD: Fund Composition, Risk Analysis & Performance

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

The expense ratio of VOO is 0.16 percentage points lower than IWD’s (0.03% vs. 0.19%). VOO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VOO has provided higher returns than IWD over the past ten years.

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

Summary

VOO IWD
Name Vanguard S&P 500 ETF iShares Russell 1000 Value ETF
Category Large Blend Large Value
Issuer Vanguard iShares
AUM 753.41B 54.1B
Avg. Return 14.45% 11.40%
Div. Yield 1.34% 1.57%
Expense Ratio 0.03% 0.19%

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 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.

VOO’s dividend yield is 0.23% lower than that of IWD (1.34% vs. 1.57%). Also, VOO yielded on average 3.05% more per year over the past decade (14.45% vs. 11.40%). The expense ratio of VOO is 0.16 percentage points lower than IWD’s (0.03% vs. 0.19%).

Fund Composition

Industry Exposure

VOO vs. IWD - Industry Exposure

VOO IWD
Technology 24.24% 10.28%
Industrials 8.86% 11.77%
Energy 2.84% 4.76%
Communication Services 11.14% 8.67%
Utilities 2.43% 4.88%
Healthcare 13.1% 17.78%
Consumer Defensive 6.32% 7.76%
Real Estate 2.58% 4.94%
Financial Services 14.2% 20.43%
Consumer Cyclical 12.01% 5.62%
Basic Materials 2.27% 3.1%

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 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.

IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.

VOO is 13.96% more exposed to the Technology sector than IWD (24.24% vs 10.28%). VOO’s exposure to Financial Services and Healthcare stocks is 6.23% lower and 4.68% lower respectively (14.2% vs. 20.43% and 13.1% vs. 17.78%). In total, Utilities, Real Estate, and Energy also make up 6.73% less of the fund’s holdings compared to IWD (7.85% vs. 14.58%).

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%.

IWD - Holdings

IWD Holdings Weight
Berkshire Hathaway Inc Class B 2.58%
JPMorgan Chase & Co 2.25%
Johnson & Johnson 2.24%
UnitedHealth Group Inc 1.78%
Procter & Gamble Co 1.71%
The Walt Disney Co 1.5%
Bank of America Corp 1.43%
Comcast Corp Class A 1.33%
Exxon Mobil Corp 1.2%
Pfizer Inc 1.18%

IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.

The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.

Performance

Annual Returns

VOO vs. IWD - Annual Returns

Year VOO IWD
2020 18.35% 2.67%
2019 31.46% 26.34%
2018 -4.42% -8.4%
2017 21.78% 13.47%
2016 11.93% 17.09%
2015 1.35% -3.95%
2014 13.63% 13.21%
2013 32.33% 32.18%
2012 15.98% 17.28%
2011 2.09% 0.21%
2010 0.0% 15.3%

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 IWD, returning 32.18% on an annual basis. The poorest year for IWD in the last ten years was 2018, with a yield of -8.4%. Most years the iShares Russell 1000 Value ETF has given investors modest returns, such as in 2014, 2017, and 2010, when gains were 13.21%, 13.47%, and 15.3% respectively.

Portfolio Growth

VOO vs. IWD - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
IWD $10,000 $26,666 11.40%

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 IWD, the end total would have been $26,666. This equates to a $16,666 profit over 10 years and a compound annual growth rate (CAGR) of 11.40%.

VOO’s CAGR is 3.05 percentage points higher than that of IWD and as a result, would have yielded $9,909 more on a $10,000 investment. Thus, VOO outperformed IWD by 3.05% annually.


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