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VTV vs. IVW: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the iShares S&P 500 Growth ETF (IVW) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and IVW is a iShares Large Growth fund. So, what’s the difference between VTV and IVW? And which fund is better?

The expense ratio of VTV is 0.14 percentage points lower than IVW’s (0.04% vs. 0.18%). VTV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VTV has provided lower returns than IVW over the past ten years.

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

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Summary

VTVIVW
NameVanguard Value Index Fund ETF SharesiShares S&P 500 Growth ETF
CategoryLarge ValueLarge Growth
IssuerVanguardiShares
AUM125.77B35.72B
Avg. Return12.07%16.74%
Div. Yield2.15%0.61%
Expense Ratio0.04%0.18%

The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

VTV’s dividend yield is 1.54% higher than that of IVW (2.15% vs. 0.61%). Also, VTV yielded on average 4.66% less per year over the past decade (12.07% vs. 16.74%). The expense ratio of VTV is 0.14 percentage points lower than IVW’s (0.04% vs. 0.18%).

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Fund Composition

Industry Exposure

VTV vs. IVW - Industry Exposure

VTVIVW
Technology7.86%37.8%
Industrials12.61%5.72%
Energy5.59%0.06%
Communication Services5.49%15.44%
Utilities5.37%0.47%
Healthcare19.84%11.88%
Consumer Defensive10.72%3.84%
Real Estate3.01%1.11%
Financial Services22.81%6.78%
Consumer Cyclical3.79%15.25%
Basic Materials2.91%1.65%

The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.

VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

VTV is 16.03% more exposed to the Financial Services sector than IVW (22.81% vs 6.78%). VTV’s exposure to Healthcare and Industrials stocks is 7.96% higher and 6.89% higher respectively (19.84% vs. 11.88% and 12.61% vs. 5.72%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 4.66% less of the fund’s holdings compared to IVW (12.17% vs. 16.83%).

Holdings

VTV - Holdings

VTV HoldingsWeight
Berkshire Hathaway Inc Class B2.98%
JPMorgan Chase & Co2.82%
Johnson & Johnson2.6%
UnitedHealth Group Inc2.27%
Procter & Gamble Co1.98%
Bank of America Corp1.91%
Exxon Mobil Corp1.6%
Comcast Corp Class A1.57%
Intel Corp1.36%
Verizon Communications Inc1.32%

VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.

Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.

IVW - Holdings

IVW HoldingsWeight
Apple Inc11.46%
Microsoft Corp10.75%
Amazon.com Inc7.14%
Facebook Inc Class A4.28%
Alphabet Inc Class A4.06%
Alphabet Inc Class C3.86%
Tesla Inc2.65%
NVIDIA Corp2.43%
PayPal Holdings Inc1.62%
Adobe Inc1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

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Risk Analysis

VTVIVW
Mean Return1.051.44
R-squared92.6193.82
Std. Deviation13.7813.77
Alpha-1.922.19
Beta0.980.98
Sharpe Ratio0.871.21
Treynor Ratio11.9417.24

The Vanguard Value Index Fund ETF Shares (VTV) has a Mean Return of 1.05 with a Standard Deviation of 13.78 and a Alpha of -1.92. Its Treynor Ratio is 11.94 while VTV’s Sharpe Ratio is 0.87. Furthermore, the fund has a R-squared of 92.61 and a Beta of 0.98.

The iShares S&P 500 Growth ETF (IVW) has a Beta of 0.98 with a Treynor Ratio of 17.24 and a Sharpe Ratio of 1.21. Its Alpha is 2.19 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a Mean Return of 1.44 and a R-squared of 93.82.

VTV’s Mean Return is 0.39 points lower than that of IVW and its R-squared is 1.21 points lower. With a Standard Deviation of 13.78, VTV is slightly more volatile than IVW. The Alpha and Beta of VTV are 4.11 points lower and 0.00 points lower than IVW’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. IVW - Annual Returns

YearVTVIVW
20202.23%33.21%
201925.85%30.91%
2018-5.39%-0.17%
201717.12%27.2%
201616.88%6.74%
2015-0.89%5.33%
201413.19%14.67%
201333.03%32.48%
201215.19%14.39%
20111.16%4.49%
201014.45%14.84%

VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% respectively.

The year 2020 was the strongest year for IVW, returning 33.21% on an annual basis. The poorest year for IVW in the last ten years was 2018, with a yield of -0.17%. Most years the iShares S&P 500 Growth ETF has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 14.39%, 14.67%, and 14.84% respectively.

Portfolio Growth

VTV vs. IVW - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTV$10,000$33,16312.07%
IVW$10,000$51,91516.74%

A $10,000 investment in VTV would have resulted in a final balance of $33,163. This is a profit of $23,163 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

With a $10,000 investment in IVW, the end total would have been $51,915. This equates to a $41,915 profit over 11 years and a compound annual growth rate (CAGR) of 16.74%.

VTV’s CAGR is 4.66 percentage points lower than that of IVW and as a result, would have yielded $18,752 less on a $10,000 investment. Thus, VTV performed worse than IVW by 4.66% annually.


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