The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the iShares Russell 1000 Value ETF (IWD) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and IWD is a iShares Large Value fund. So, what’s the difference between VTI and IWD? And which fund is better?
The expense ratio of VTI is 0.16 percentage points lower than IWD’s (0.03% vs. 0.19%). VTI also has a higher exposure to the technology sector and a lower standard deviation. Overall, VTI has provided higher returns than IWD over the past ten years.
In this article, we’ll compare VTI vs. IWD. We’ll look at annual returns and risk metrics, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss VTI’s and IWD’s performance, industry exposure, and fund composition and examine how these affect their overall returns.
Summary
| VTI | IWD | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | iShares Russell 1000 Value ETF |
| Category | Large Blend | Large Value |
| Issuer | Vanguard | iShares |
| AUM | 1.26T | 54.1B |
| Avg. Return | 14.70% | 11.40% |
| Div. Yield | 1.26% | 1.57% |
| Expense Ratio | 0.03% | 0.19% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.03%.
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
VTI’s dividend yield is 0.31% lower than that of IWD (1.26% vs. 1.57%). Also, VTI yielded on average 3.30% more per year over the past decade (14.70% vs. 11.40%). The expense ratio of VTI is 0.16 percentage points lower than IWD’s (0.03% vs. 0.19%).
Fund Composition
Industry Exposure
| VTI | IWD | |
| Technology | 24.1% | 10.28% |
| Industrials | 9.39% | 11.77% |
| Energy | 2.77% | 4.76% |
| Communication Services | 10.4% | 8.67% |
| Utilities | 2.29% | 4.88% |
| Healthcare | 13.64% | 17.78% |
| Consumer Defensive | 5.77% | 7.76% |
| Real Estate | 3.59% | 4.94% |
| Financial Services | 13.77% | 20.43% |
| Consumer Cyclical | 11.83% | 5.62% |
| Basic Materials | 2.44% | 3.1% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.
VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
VTI is 13.82% more exposed to the Technology sector than IWD (24.1% vs 10.28%). VTI’s exposure to Financial Services and Healthcare stocks is 6.66% lower and 4.14% lower respectively (13.77% vs. 20.43% and 13.64% vs. 17.78%). In total, Basic Materials, Energy, and Real Estate also make up 4.00% less of the fund’s holdings compared to IWD (8.80% vs. 12.80%).
Holdings
| VTI Holdings | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
Performance
Annual Returns
| Year | VTI | IWD |
| 2020 | 20.95% | 2.67% |
| 2019 | 30.8% | 26.34% |
| 2018 | -5.13% | -8.4% |
| 2017 | 21.16% | 13.47% |
| 2016 | 12.68% | 17.09% |
| 2015 | 0.4% | -3.95% |
| 2014 | 12.56% | 13.21% |
| 2013 | 33.51% | 32.18% |
| 2012 | 16.41% | 17.28% |
| 2011 | 1.06% | 0.21% |
| 2010 | 17.26% | 15.3% |
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% respectively.
The year 2013 was the strongest year for IWD, returning 32.18% on an annual basis. The poorest year for IWD in the last ten years was 2018, with a yield of -8.4%. Most years the iShares Russell 1000 Value ETF has given investors modest returns, such as in 2014, 2017, and 2010, when gains were 13.21%, 13.47%, and 15.3% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $42,648 | 14.70% |
| IWD | $10,000 | $30,746 | 11.40% |
A $10,000 investment in VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
With a $10,000 investment in IWD, the end total would have been $30,746. This equates to a $20,746 profit over 11 years and a compound annual growth rate (CAGR) of 11.40%.
VTI’s CAGR is 3.30 percentage points higher than that of IWD and as a result, would have yielded $11,902 more on a $10,000 investment. Thus, VTI outperformed IWD by 3.30% annually.
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