The Vanguard Total World Stock Index Fund ETF Shares (VT) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between VT and IWS? And which fund is better?
The expense ratio of VT is 0.15 percentage points lower than IWS’s (0.08% vs. 0.23%). VT also has a higher exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than IWS over the past 11 years.
In this article, we’ll compare VT vs. IWS. We’ll look at industry exposure and performance, as well as at their fund composition and holdings. Moreover, I’ll also discuss VT’s and IWS’s portfolio growth, risk metrics, and annual returns and examine how these affect their overall returns.
Summary
| VT | IWS | |
| Name | Vanguard Total World Stock Index Fund ETF Shares | iShares Russell Mid-Cap Value ETF |
| Category | N/A | Mid-Cap Value |
| Issuer | Vanguard | iShares |
| AUM | 30.44B | 14.24B |
| Avg. Return | 10.42% | 12.35% |
| Div. Yield | 1.65% | 1.34% |
| Expense Ratio | 0.08% | 0.23% |
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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
VT’s dividend yield is 0.31% higher than that of IWS (1.65% vs. 1.34%). Also, VT yielded on average 1.93% less per year over the past decade (10.42% vs. 12.35%). The expense ratio of VT is 0.15 percentage points lower than IWS’s (0.08% vs. 0.23%).
Fund Composition
Industry Exposure
| VT | IWS | |
| Technology | 19.63% | 11.39% |
| Industrials | 10.7% | 14.6% |
| Energy | 3.48% | 4.71% |
| Communication Services | 9.02% | 4.08% |
| Utilities | 2.6% | 6.97% |
| Healthcare | 11.58% | 8.56% |
| Consumer Defensive | 6.71% | 4.76% |
| Real Estate | 3.64% | 11.71% |
| Financial Services | 15.36% | 15.75% |
| Consumer Cyclical | 12.32% | 12.07% |
| Basic Materials | 4.97% | 5.4% |
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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.
IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.
VT is 8.24% more exposed to the Technology sector than IWS (19.63% vs 11.39%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 0.39% lower and 0.25% higher respectively (15.36% vs. 15.75% and 12.32% vs. 12.07%). In total, Energy, Real Estate, and Basic Materials also make up 9.73% less of the fund’s holdings compared to IWS (12.09% vs. 21.82%).
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%.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
Risk Analysis
| VT | IWS | |
| Mean Return | 0.9 | 1.06 |
| R-squared | 99.35 | 87.04 |
| Std. Deviation | 14.19 | 16.03 |
| Alpha | 0.2 | -4.11 |
| Beta | 1.01 | 1.1 |
| Sharpe Ratio | 0.71 | 0.75 |
| Treynor Ratio | 9.5 | 10.3 |
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Sharpe Ratio of 0.71 with a Beta of 1.01 and a Mean Return of 0.9. Its Standard Deviation is 14.19 while VT’s Treynor Ratio is 9.5. Furthermore, the fund has a R-squared of 99.35 and a Alpha of 0.2.
The iShares Russell Mid-Cap Value ETF (IWS) has a R-squared of 87.04 with a Standard Deviation of 16.03 and a Treynor Ratio of 10.3. Its Alpha is -4.11 while IWS’s Mean Return is 1.06. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Beta of 1.1.
VT’s Mean Return is 0.16 points lower than that of IWS and its R-squared is 12.31 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than IWS. The Alpha and Beta of VT are 4.31 points higher and 0.09 points lower than IWS’s Alpha and Beta.
Performance
Annual Returns
| Year | VT | IWS |
| 2020 | 16.74% | 4.76% |
| 2019 | 26.8% | 26.78% |
| 2018 | -9.67% | -12.36% |
| 2017 | 24.19% | 13.1% |
| 2016 | 8.77% | 19.69% |
| 2015 | -1.88% | -4.93% |
| 2014 | 3.97% | 14.49% |
| 2013 | 22.98% | 33.11% |
| 2012 | 17.33% | 18.27% |
| 2011 | -7.71% | -1.55% |
| 2010 | 13.05% | 24.46% |
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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VT | $10,000 | $27,739 | 10.42% |
| IWS | $10,000 | $33,083 | 12.35% |
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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.
VT’s CAGR is 1.93 percentage points lower than that of IWS and as a result, would have yielded $5,344 less on a $10,000 investment. Thus, VT performed worse than IWS by 1.93% annually.
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