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VTI vs. IWN: What’s The Difference?

The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between VTI and IWN? And which fund is better?

The expense ratio of VTI is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%). VTI also has a higher exposure to the technology sector and a lower standard deviation. Overall, VTI has provided higher returns than IWN over the past ten years.

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

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Summary

VTIIWN
NameVanguard Total Stock Market Index Fund ETF SharesiShares Russell 2000 Value ETF
CategoryLarge BlendSmall Value
IssuerVanguardiShares
AUM1.26T15.48B
Avg. Return14.70%10.96%
Div. Yield1.26%1.26%
Expense Ratio0.03%0.24%

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 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%.

VTI’s dividend yield is 0.00% lower than that of IWN (1.26% vs. 1.26%). Also, VTI yielded on average 3.74% more per year over the past decade (14.70% vs. 10.96%). The expense ratio of VTI is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%).

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Fund Composition

Industry Exposure

VTI vs. IWN - Industry Exposure

VTIIWN
Technology24.1%6.02%
Industrials9.39%14.58%
Energy2.77%5.84%
Communication Services10.4%4.17%
Utilities2.29%4.69%
Healthcare13.64%10.94%
Consumer Defensive5.77%3.77%
Real Estate3.59%14.36%
Financial Services13.77%22.97%
Consumer Cyclical11.83%8.39%
Basic Materials2.44%4.29%

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 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%.

VTI is 18.08% more exposed to the Technology sector than IWN (24.1% vs 6.02%). VTI’s exposure to Financial Services and Healthcare stocks is 9.20% lower and 2.70% higher respectively (13.77% vs. 22.97% and 13.64% vs. 10.94%). In total, Basic Materials, Energy, and Real Estate also make up 15.69% less of the fund’s holdings compared to IWN (8.80% vs. 24.49%).

Holdings

VTI - Holdings

VTI HoldingsWeight
Apple Inc4.9%
Microsoft Corp4.6%
Amazon.com Inc3.33%
Facebook Inc Class A1.88%
Alphabet Inc Class A1.66%
Alphabet Inc Class C1.56%
Tesla Inc1.18%
Berkshire Hathaway Inc Class B1.09%
NVIDIA Corp1.07%
JPMorgan Chase & Co1.06%

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%.

IWN - Holdings

IWN HoldingsWeight
AMC Entertainment Holdings Inc Class A1.06%
Tenet Healthcare Corp0.47%
Stag Industrial Inc0.47%
Ovintiv Inc0.45%
EMCOR Group Inc0.42%
Valley National Bancorp0.37%
Chesapeake Energy Corp Ordinary Shares – New0.37%
Agree Realty Corp0.36%
Macy’s Inc0.35%
Essent Group Ltd0.35%

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%.

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Performance

Annual Returns

VTI vs. IWN - Annual Returns

YearVTIIWN
202020.95%4.5%
201930.8%22.17%
2018-5.13%-12.94%
201721.16%7.73%
201612.68%31.64%
20150.4%-7.53%
201412.56%4.13%
201333.51%34.3%
201216.41%17.92%
20111.06%-5.64%
201017.26%24.29%

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 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

VTI vs. IWN - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTI$10,000$42,64814.70%
IWN$10,000$28,18910.96%

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 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%.

VTI’s CAGR is 3.74 percentage points higher than that of IWN and as a result, would have yielded $14,459 more on a $10,000 investment. Thus, VTI outperformed IWN by 3.74% annually.


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