VT vs. IWP: What’s The Difference?

The Vanguard Total World Stock Index Fund ETF Shares (VT) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between VT and IWP? And which fund is better?

The expense ratio of VT is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%). VT also has a lower exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than IWP over the past 11 years.

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

Summary

VT IWP
Name Vanguard Total World Stock Index Fund ETF Shares iShares Russell Mid-Cap Growth ETF
Category N/A Mid-Cap Growth
Issuer Vanguard iShares
AUM 30.44B 15.7B
Avg. Return 10.42% 16.75%
Div. Yield 1.65% 0.26%
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 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%.

VT’s dividend yield is 1.39% higher than that of IWP (1.65% vs. 0.26%). Also, VT yielded on average 6.33% less per year over the past decade (10.42% vs. 16.75%). The expense ratio of VT is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%).

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Fund Composition

Industry Exposure

VT vs. IWP - Industry Exposure

VT IWP
Technology 19.63% 33.88%
Industrials 10.7% 14.09%
Energy 3.48% 1.51%
Communication Services 9.02% 6.32%
Utilities 2.6% 0.16%
Healthcare 11.58% 16.79%
Consumer Defensive 6.71% 2.32%
Real Estate 3.64% 2.46%
Financial Services 15.36% 4.52%
Consumer Cyclical 12.32% 16.09%
Basic Materials 4.97% 1.86%

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 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%.

VT is 14.25% less exposed to the Technology sector than IWP (19.63% vs 33.88%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 10.84% higher and 3.77% lower respectively (15.36% vs. 4.52% and 12.32% vs. 16.09%). In total, Energy, Real Estate, and Basic Materials also make up 6.26% more of the fund’s holdings compared to IWP (12.09% vs. 5.83%).

Holdings

VT - 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%.

IWP - Holdings

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%.

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Risk Analysis

VT IWP
Mean Return 0.9 1.27
R-squared 99.35 87.01
Std. Deviation 14.19 16.05
Alpha 0.2 -1.03
Beta 1.01 1.1
Sharpe Ratio 0.71 0.91
Treynor Ratio 9.5 12.98

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Mean Return of 0.9 with a Sharpe Ratio of 0.71 and a R-squared of 99.35. Its Standard Deviation is 14.19 while VT’s Alpha is 0.2. Furthermore, the fund has a Beta of 1.01 and a Treynor Ratio of 9.5.

The iShares Russell Mid-Cap Growth ETF (IWP) has a Standard Deviation of 16.05 with a Treynor Ratio of 12.98 and a R-squared of 87.01. Its Sharpe Ratio is 0.91 while IWP’s Mean Return is 1.27. Furthermore, the fund has a Beta of 1.1 and a Alpha of -1.03.

VT’s Mean Return is 0.37 points lower than that of IWP and its R-squared is 12.34 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than IWP. The Alpha and Beta of VT are 1.23 points higher and 0.09 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

VT vs. IWP - Annual Returns

Year VT IWP
2020 16.74% 35.29%
2019 26.8% 35.14%
2018 -9.67% -4.95%
2017 24.19% 24.98%
2016 8.77% 7.15%
2015 -1.88% -0.39%
2014 3.97% 11.68%
2013 22.98% 35.44%
2012 17.33% 15.62%
2011 -7.71% -1.82%
2010 13.05% 26.1%

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 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

VT vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VT $10,000 $27,739 10.42%
IWP $10,000 $50,191 16.75%

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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.

VT’s CAGR is 6.33 percentage points lower than that of IWP and as a result, would have yielded $22,452 less on a $10,000 investment. Thus, VT performed worse than IWP by 6.33% annually.


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