The Vanguard Total World Stock Index Fund ETF Shares (VT) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and IWN is a iShares Small Value fund. So, what’s the difference between VT and IWN? And which fund is better?
The expense ratio of VT is 0.16 percentage points lower than IWN’s (0.08% vs. 0.24%). VT also has a higher exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than IWN over the past 11 years.
In this article, we’ll compare VT vs. IWN. We’ll look at risk metrics and industry exposure, as well as at their holdings and annual returns. Moreover, I’ll also discuss VT’s and IWN’s portfolio growth, fund composition, and performance and examine how these affect their overall returns.
Summary
| VT | IWN | |
| Name | Vanguard Total World Stock Index Fund ETF Shares | iShares Russell 2000 Value ETF |
| Category | N/A | Small Value |
| Issuer | Vanguard | iShares |
| AUM | 30.44B | 15.48B |
| Avg. Return | 10.42% | 10.96% |
| Div. Yield | 1.65% | 1.26% |
| Expense Ratio | 0.08% | 0.24% |
The Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
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%.
VT’s dividend yield is 0.39% higher than that of IWN (1.65% vs. 1.26%). Also, VT yielded on average 0.55% less per year over the past decade (10.42% vs. 10.96%). The expense ratio of VT is 0.16 percentage points lower than IWN’s (0.08% vs. 0.24%).
Fund Composition
Industry Exposure
| VT | IWN | |
| Technology | 19.63% | 6.02% |
| Industrials | 10.7% | 14.58% |
| Energy | 3.48% | 5.84% |
| Communication Services | 9.02% | 4.17% |
| Utilities | 2.6% | 4.69% |
| Healthcare | 11.58% | 10.94% |
| Consumer Defensive | 6.71% | 3.77% |
| Real Estate | 3.64% | 14.36% |
| Financial Services | 15.36% | 22.97% |
| Consumer Cyclical | 12.32% | 8.39% |
| Basic Materials | 4.97% | 4.29% |
The Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
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%.
VT is 13.61% more exposed to the Technology sector than IWN (19.63% vs 6.02%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 7.61% lower and 3.93% higher respectively (15.36% vs. 22.97% and 12.32% vs. 8.39%). In total, Energy, Real Estate, and Basic Materials also make up 12.40% less of the fund’s holdings compared to IWN (12.09% vs. 24.49%).
Holdings
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
| IWN Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 1.06% |
| Tenet Healthcare Corp | 0.47% |
| Stag Industrial Inc | 0.47% |
| Ovintiv Inc | 0.45% |
| EMCOR Group Inc | 0.42% |
| Valley National Bancorp | 0.37% |
| Chesapeake Energy Corp Ordinary Shares – New | 0.37% |
| Agree Realty Corp | 0.36% |
| Macy’s Inc | 0.35% |
| Essent Group Ltd | 0.35% |
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%.
Risk Analysis
| VT | IWN | |
| Mean Return | 0.9 | 1.01 |
| R-squared | 99.35 | 72.64 |
| Std. Deviation | 14.19 | 19.28 |
| Alpha | 0.2 | -6.32 |
| Beta | 1.01 | 1.21 |
| Sharpe Ratio | 0.71 | 0.59 |
| Treynor Ratio | 9.5 | 8.3 |
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Mean Return of 0.9 with a Alpha of 0.2 and a Treynor Ratio of 9.5. Its Standard Deviation is 14.19 while VT’s Beta is 1.01. Furthermore, the fund has a R-squared of 99.35 and a Sharpe Ratio of 0.71.
The iShares Russell 2000 Value ETF (IWN) has a Beta of 1.21 with a Treynor Ratio of 8.3 and a Sharpe Ratio of 0.59. Its Alpha is -6.32 while IWN’s Standard Deviation is 19.28. Furthermore, the fund has a Mean Return of 1.01 and a R-squared of 72.64.
VT’s Mean Return is 0.11 points lower than that of IWN and its R-squared is 26.71 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than IWN. The Alpha and Beta of VT are 6.52 points higher and 0.20 points lower than IWN’s Alpha and Beta.
Performance
Annual Returns
| Year | VT | IWN |
| 2020 | 16.74% | 4.5% |
| 2019 | 26.8% | 22.17% |
| 2018 | -9.67% | -12.94% |
| 2017 | 24.19% | 7.73% |
| 2016 | 8.77% | 31.64% |
| 2015 | -1.88% | -7.53% |
| 2014 | 3.97% | 4.13% |
| 2013 | 22.98% | 34.3% |
| 2012 | 17.33% | 17.92% |
| 2011 | -7.71% | -5.64% |
| 2010 | 13.05% | 24.29% |
VT had its best year in 2019 with an annual return of 26.8%. VT’s worst year over the past decade yielded -9.67% and occurred in 2018. In most years the Vanguard Total World Stock Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 8.77%, 13.05%, and 16.74% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VT | $10,000 | $27,739 | 10.42% |
| IWN | $10,000 | $28,189 | 10.96% |
A $10,000 investment in VT would have resulted in a final balance of $27,739. This is a profit of $17,739 over 11 years and amounts to a compound annual growth rate (CAGR) of 10.42%.
With a $10,000 investment in IWN, the end total would have been $28,189. This equates to a $18,189 profit over 11 years and a compound annual growth rate (CAGR) of 10.96%.
VT’s CAGR is 0.55 percentage points lower than that of IWN and as a result, would have yielded $450 less on a $10,000 investment. Thus, VT performed worse than IWN by 0.55% annually.
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