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VOO vs. IWN: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between VOO and IWN? And which fund is better?

The expense ratio of VOO is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%). VOO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VOO has provided higher returns than IWN over the past ten years.

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

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Summary

VOOIWN
NameVanguard S&P 500 ETFiShares Russell 2000 Value ETF
CategoryLarge BlendSmall Value
IssuerVanguardiShares
AUM753.41B15.48B
Avg. Return14.45%10.96%
Div. Yield1.34%1.26%
Expense Ratio0.03%0.24%

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 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.

VOO’s dividend yield is 0.08% higher than that of IWN (1.34% vs. 1.26%). Also, VOO yielded on average 3.49% more per year over the past decade (14.45% vs. 10.96%). The expense ratio of VOO is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%).

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Fund Composition

Industry Exposure

VOO vs. IWN - Industry Exposure

VOOIWN
Technology24.24%6.02%
Industrials8.86%14.58%
Energy2.84%5.84%
Communication Services11.14%4.17%
Utilities2.43%4.69%
Healthcare13.1%10.94%
Consumer Defensive6.32%3.77%
Real Estate2.58%14.36%
Financial Services14.2%22.97%
Consumer Cyclical12.01%8.39%
Basic Materials2.27%4.29%

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 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.

IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.

VOO is 18.22% more exposed to the Technology sector than IWN (24.24% vs 6.02%). VOO’s exposure to Financial Services and Healthcare stocks is 8.77% lower and 2.16% higher respectively (14.2% vs. 22.97% and 13.1% vs. 10.94%). In total, Utilities, Real Estate, and Energy also make up 17.04% less of the fund’s holdings compared to IWN (7.85% vs. 24.89%).

Holdings

VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

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%.

IWN - Holdings

IWN HoldingsWeight
AMC Entertainment Holdings Inc Class A1.06%
Tenet Healthcare Corp0.47%
Stag Industrial Inc0.47%
Ovintiv Inc0.45%
EMCOR Group Inc0.42%
Valley National Bancorp0.37%
Chesapeake Energy Corp Ordinary Shares – New0.37%
Agree Realty Corp0.36%
Macy’s Inc0.35%
Essent Group Ltd0.35%

IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.

Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.

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Performance

Annual Returns

VOO vs. IWN - Annual Returns

YearVOOIWN
202018.35%4.5%
201931.46%22.17%
2018-4.42%-12.94%
201721.78%7.73%
201611.93%31.64%
20151.35%-7.53%
201413.63%4.13%
201332.33%34.3%
201215.98%17.92%
20112.09%-5.64%
20100.0%24.29%

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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.

Portfolio Growth

VOO vs. IWN - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$36,57514.45%
IWN$10,000$22,68010.96%

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 IWN, the end total would have been $22,680. This equates to a $12,680 profit over 10 years and a compound annual growth rate (CAGR) of 10.96%.

VOO’s CAGR is 3.49 percentage points higher than that of IWN and as a result, would have yielded $13,895 more on a $10,000 investment. Thus, VOO outperformed IWN by 3.49% annually.


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