VTV vs. IWF: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the iShares Russell 1000 Growth ETF (IWF) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and IWF is a iShares Large Growth fund. So, what’s the difference between VTV and IWF? And which fund is better?

The expense ratio of VTV is 0.15 percentage points lower than IWF’s (0.04% vs. 0.19%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than IWF over the past ten years.

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

Summary

VTV IWF
Name Vanguard Value Index Fund ETF Shares iShares Russell 1000 Growth ETF
Category Large Value Large Growth
Issuer Vanguard iShares
AUM 125.77B 72.16B
Avg. Return 12.07% 17.72%
Div. Yield 2.15% 0.52%
Expense Ratio 0.04% 0.19%

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 Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.

VTV’s dividend yield is 1.63% higher than that of IWF (2.15% vs. 0.52%). Also, VTV yielded on average 5.65% less per year over the past decade (12.07% vs. 17.72%). The expense ratio of VTV is 0.15 percentage points lower than IWF’s (0.04% vs. 0.19%).

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Fund Composition

Industry Exposure

VTV vs. IWF - Industry Exposure

VTV IWF
Technology 7.86% 39.29%
Industrials 12.61% 6.19%
Energy 5.59% 0.28%
Communication Services 5.49% 12.82%
Utilities 5.37% 0.03%
Healthcare 19.84% 9.23%
Consumer Defensive 10.72% 4.31%
Real Estate 3.01% 1.85%
Financial Services 22.81% 7.36%
Consumer Cyclical 3.79% 17.62%
Basic Materials 2.91% 1.01%

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 Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.

IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.

VTV is 15.45% more exposed to the Financial Services sector than IWF (22.81% vs 7.36%). VTV’s exposure to Healthcare and Industrials stocks is 10.61% higher and 6.42% higher respectively (19.84% vs. 9.23% and 12.61% vs. 6.19%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 7.33% less of the fund’s holdings compared to IWF (12.17% vs. 19.50%).

Holdings

VTV - Holdings

VTV Holdings Weight
Berkshire Hathaway Inc Class B 2.98%
JPMorgan Chase & Co 2.82%
Johnson & Johnson 2.6%
UnitedHealth Group Inc 2.27%
Procter & Gamble Co 1.98%
Bank of America Corp 1.91%
Exxon Mobil Corp 1.6%
Comcast Corp Class A 1.57%
Intel Corp 1.36%
Verizon Communications Inc 1.32%

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%.

IWF - Holdings

IWF Holdings Weight
Apple Inc 10.51%
Microsoft Corp 9.85%
Amazon.com Inc 6.63%
Facebook Inc Class A 3.91%
Alphabet Inc Class A 3.2%
Alphabet Inc Class C 3.03%
Tesla Inc 2.45%
NVIDIA Corp 2.14%
Visa Inc Class A 1.91%
The Home Depot Inc 1.62%

IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.

Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.

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Risk Analysis

VTV IWF
Mean Return 1.05 1.48
R-squared 92.61 92.93
Std. Deviation 13.78 14.42
Alpha -1.92 2.16
Beta 0.98 1.03
Sharpe Ratio 0.87 1.19
Treynor Ratio 11.94 17.1

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

The iShares Russell 1000 Growth ETF (IWF) has a R-squared of 92.93 with a Sharpe Ratio of 1.19 and a Alpha of 2.16. Its Beta is 1.03 while IWF’s Treynor Ratio is 17.1. Furthermore, the fund has a Mean Return of 1.48 and a Standard Deviation of 14.42.

VTV’s Mean Return is 0.43 points lower than that of IWF and its R-squared is 0.32 points lower. With a Standard Deviation of 13.78, VTV is slightly less volatile than IWF. The Alpha and Beta of VTV are 4.08 points lower and 0.05 points lower than IWF’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. IWF - Annual Returns

Year VTV IWF
2020 2.23% 38.21%
2019 25.85% 36.08%
2018 -5.39% -1.68%
2017 17.12% 29.96%
2016 16.88% 6.92%
2015 -0.89% 5.48%
2014 13.19% 12.84%
2013 33.03% 33.19%
2012 15.19% 15.03%
2011 1.16% 2.47%
2010 14.45% 16.47%

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 IWF, returning 38.21% on an annual basis. The poorest year for IWF in the last ten years was 2018, with a yield of -1.68%. Most years the iShares Russell 1000 Growth ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.84%, 15.03%, and 16.47% respectively.

Portfolio Growth

VTV vs. IWF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $33,163 12.07%
IWF $10,000 $55,920 17.72%

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 IWF, the end total would have been $55,920. This equates to a $45,920 profit over 11 years and a compound annual growth rate (CAGR) of 17.72%.

VTV’s CAGR is 5.65 percentage points lower than that of IWF and as a result, would have yielded $22,757 less on a $10,000 investment. Thus, VTV performed worse than IWF by 5.65% annually.


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