The Vanguard S&P 500 ETF (VOO) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between VOO and IWP? And which fund is better?
The expense ratio of VOO is 0.21 percentage points lower than IWP’s (0.03% vs. 0.24%). VOO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VOO has provided lower returns than IWP over the past ten years.
In this article, we’ll compare VOO vs. IWP. We’ll look at fund composition and portfolio growth, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss VOO’s and IWP’s holdings, annual returns, and performance and examine how these affect their overall returns.
Summary
| VOO | IWP | |
| Name | Vanguard S&P 500 ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Large Blend | Mid-Cap Growth |
| Issuer | Vanguard | iShares |
| AUM | 753.41B | 15.7B |
| Avg. Return | 14.45% | 16.75% |
| Div. Yield | 1.34% | 0.26% |
| Expense Ratio | 0.03% | 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 Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
VOO’s dividend yield is 1.08% higher than that of IWP (1.34% vs. 0.26%). Also, VOO yielded on average 2.30% less per year over the past decade (14.45% vs. 16.75%). The expense ratio of VOO is 0.21 percentage points lower than IWP’s (0.03% vs. 0.24%).
Fund Composition
Industry Exposure
| VOO | IWP | |
| Technology | 24.24% | 33.88% |
| Industrials | 8.86% | 14.09% |
| Energy | 2.84% | 1.51% |
| Communication Services | 11.14% | 6.32% |
| Utilities | 2.43% | 0.16% |
| Healthcare | 13.1% | 16.79% |
| Consumer Defensive | 6.32% | 2.32% |
| Real Estate | 2.58% | 2.46% |
| Financial Services | 14.2% | 4.52% |
| Consumer Cyclical | 12.01% | 16.09% |
| Basic Materials | 2.27% | 1.86% |
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 Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
VOO is 9.64% less exposed to the Technology sector than IWP (24.24% vs 33.88%). VOO’s exposure to Financial Services and Healthcare stocks is 9.68% higher and 3.69% lower respectively (14.2% vs. 4.52% and 13.1% vs. 16.79%). In total, Utilities, Real Estate, and Energy also make up 3.72% more of the fund’s holdings compared to IWP (7.85% vs. 4.13%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Performance
Annual Returns
| Year | VOO | IWP |
| 2020 | 18.35% | 35.29% |
| 2019 | 31.46% | 35.14% |
| 2018 | -4.42% | -4.95% |
| 2017 | 21.78% | 24.98% |
| 2016 | 11.93% | 7.15% |
| 2015 | 1.35% | -0.39% |
| 2014 | 13.63% | 11.68% |
| 2013 | 32.33% | 35.44% |
| 2012 | 15.98% | 15.62% |
| 2011 | 2.09% | -1.82% |
| 2010 | 0.0% | 26.1% |
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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VOO | $10,000 | $36,575 | 14.45% |
| IWP | $10,000 | $39,802 | 16.75% |
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 IWP, the end total would have been $39,802. This equates to a $29,802 profit over 10 years and a compound annual growth rate (CAGR) of 16.75%.
VOO’s CAGR is 2.30 percentage points lower than that of IWP and as a result, would have yielded $3,227 less on a $10,000 investment. Thus, VOO performed worse than IWP by 2.30% annually.
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