VOO vs. IWF: What’s The Difference?

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

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

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

Summary

VOO IWF
Name Vanguard S&P 500 ETF iShares Russell 1000 Growth ETF
Category Large Blend Large Growth
Issuer Vanguard iShares
AUM 753.41B 72.16B
Avg. Return 14.45% 17.72%
Div. Yield 1.34% 0.52%
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 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.

VOO’s dividend yield is 0.82% higher than that of IWF (1.34% vs. 0.52%). Also, VOO yielded on average 3.28% less per year over the past decade (14.45% vs. 17.72%). The expense ratio of VOO is 0.16 percentage points lower than IWF’s (0.03% vs. 0.19%).

Fund Composition

Industry Exposure

VOO vs. IWF - Industry Exposure

VOO IWF
Technology 24.24% 39.29%
Industrials 8.86% 6.19%
Energy 2.84% 0.28%
Communication Services 11.14% 12.82%
Utilities 2.43% 0.03%
Healthcare 13.1% 9.23%
Consumer Defensive 6.32% 4.31%
Real Estate 2.58% 1.85%
Financial Services 14.2% 7.36%
Consumer Cyclical 12.01% 17.62%
Basic Materials 2.27% 1.01%

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 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.

IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.

VOO is 15.05% less exposed to the Technology sector than IWF (24.24% vs 39.29%). VOO’s exposure to Financial Services and Healthcare stocks is 6.84% higher and 3.87% higher respectively (14.2% vs. 7.36% and 13.1% vs. 9.23%). In total, Utilities, Real Estate, and Energy also make up 5.69% more of the fund’s holdings compared to IWF (7.85% vs. 2.16%).

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%.

IWF - Holdings

IWF Holdings Weight
Apple Inc 10.51%
Microsoft Corp 9.85%
Amazon.com Inc 6.63%
Facebook Inc Class A 3.91%
Alphabet Inc Class A 3.2%
Alphabet Inc Class C 3.03%
Tesla Inc 2.45%
NVIDIA Corp 2.14%
Visa Inc Class A 1.91%
The Home Depot Inc 1.62%

IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.

Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.

Performance

Annual Returns

VOO vs. IWF - Annual Returns

Year VOO IWF
2020 18.35% 38.21%
2019 31.46% 36.08%
2018 -4.42% -1.68%
2017 21.78% 29.96%
2016 11.93% 6.92%
2015 1.35% 5.48%
2014 13.63% 12.84%
2013 32.33% 33.19%
2012 15.98% 15.03%
2011 2.09% 2.47%
2010 0.0% 16.47%

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 IWF, returning 38.21% on an annual basis. The poorest year for IWF in the last ten years was 2018, with a yield of -1.68%. Most years the iShares Russell 1000 Growth ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.84%, 15.03%, and 16.47% respectively.

Portfolio Growth

VOO vs. IWF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
IWF $10,000 $48,012 17.72%

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 IWF, the end total would have been $48,012. This equates to a $38,012 profit over 10 years and a compound annual growth rate (CAGR) of 17.72%.

VOO’s CAGR is 3.28 percentage points lower than that of IWF and as a result, would have yielded $11,437 less on a $10,000 investment. Thus, VOO performed worse than IWF by 3.28% annually.


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