VOO vs. IWR: What’s The Difference?

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

The expense ratio of VOO is 0.16 percentage points lower than IWR’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 IWR over the past ten years.

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

Summary

VOO IWR
Name Vanguard S&P 500 ETF iShares Russell Mid-Cap ETF
Category Large Blend Mid-Cap Blend
Issuer Vanguard iShares
AUM 753.41B 29.84B
Avg. Return 14.45% 14.15%
Div. Yield 1.34% 0.99%
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 Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

VOO’s dividend yield is 0.35% higher than that of IWR (1.34% vs. 0.99%). Also, VOO yielded on average 0.30% more per year over the past decade (14.45% vs. 14.15%). The expense ratio of VOO is 0.16 percentage points lower than IWR’s (0.03% vs. 0.19%).

Fund Composition

Industry Exposure

VOO vs. IWR - Industry Exposure

VOO IWR
Technology 24.24% 19.67%
Industrials 8.86% 14.54%
Energy 2.84% 3.48%
Communication Services 11.14% 4.64%
Utilities 2.43% 4.46%
Healthcare 13.1% 11.76%
Consumer Defensive 6.32% 3.82%
Real Estate 2.58% 8.31%
Financial Services 14.2% 11.64%
Consumer Cyclical 12.01% 13.59%
Basic Materials 2.27% 4.1%

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 Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

VOO is 4.57% more exposed to the Technology sector than IWR (24.24% vs 19.67%). VOO’s exposure to Financial Services and Healthcare stocks is 2.56% higher and 1.34% higher respectively (14.2% vs. 11.64% and 13.1% vs. 11.76%). In total, Utilities, Real Estate, and Energy also make up 8.40% less of the fund’s holdings compared to IWR (7.85% vs. 16.25%).

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%.

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

Performance

Annual Returns

VOO vs. IWR - Annual Returns

Year VOO IWR
2020 18.35% 16.91%
2019 31.46% 30.31%
2018 -4.42% -9.13%
2017 21.78% 18.32%
2016 11.93% 13.58%
2015 1.35% -2.57%
2014 13.63% 13.03%
2013 32.33% 34.5%
2012 15.98% 17.13%
2011 2.09% -1.67%
2010 0.0% 25.25%

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 IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% respectively.

Portfolio Growth

VOO vs. IWR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
IWR $10,000 $31,737 14.15%

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 IWR, the end total would have been $31,737. This equates to a $21,737 profit over 10 years and a compound annual growth rate (CAGR) of 14.15%.

VOO’s CAGR is 0.30 percentage points higher than that of IWR and as a result, would have yielded $4,838 more on a $10,000 investment. Thus, VOO outperformed IWR by 0.30% annually.


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