VTV vs. IWP: What’s The Difference?

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

The expense ratio of VTV is 0.20 percentage points lower than IWP’s (0.04% vs. 0.24%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than IWP over the past ten years.

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

Summary

VTV IWP
Name Vanguard Value Index Fund ETF Shares iShares Russell Mid-Cap Growth ETF
Category Large Value Mid-Cap Growth
Issuer Vanguard iShares
AUM 125.77B 15.7B
Avg. Return 12.07% 16.75%
Div. Yield 2.15% 0.26%
Expense Ratio 0.04% 0.24%

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 Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

VTV’s dividend yield is 1.89% higher than that of IWP (2.15% vs. 0.26%). Also, VTV yielded on average 4.67% less per year over the past decade (12.07% vs. 16.75%). The expense ratio of VTV is 0.20 percentage points lower than IWP’s (0.04% vs. 0.24%).

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Fund Composition

Industry Exposure

VTV vs. IWP - Industry Exposure

VTV IWP
Technology 7.86% 33.88%
Industrials 12.61% 14.09%
Energy 5.59% 1.51%
Communication Services 5.49% 6.32%
Utilities 5.37% 0.16%
Healthcare 19.84% 16.79%
Consumer Defensive 10.72% 2.32%
Real Estate 3.01% 2.46%
Financial Services 22.81% 4.52%
Consumer Cyclical 3.79% 16.09%
Basic Materials 2.91% 1.86%

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 Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

VTV is 18.29% more exposed to the Financial Services sector than IWP (22.81% vs 4.52%). VTV’s exposure to Healthcare and Industrials stocks is 3.05% higher and 1.48% lower respectively (19.84% vs. 16.79% and 12.61% vs. 14.09%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 6.54% less of the fund’s holdings compared to IWP (12.17% vs. 18.71%).

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%.

IWP - Holdings

IWP Holdings Weight
IDEXX Laboratories Inc 1.3%
DocuSign Inc 1.3%
Roku Inc Class A 1.29%
Match Group Inc 1.06%
Chipotle Mexican Grill Inc 1.06%
Pinterest Inc 1.05%
Veeva Systems Inc Class A 1.04%
Palantir Technologies Inc Ordinary Shares – Class A 1.04%
Lululemon Athletica Inc 1.01%
DexCom Inc 1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

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Risk Analysis

VTV IWP
Mean Return 1.05 1.27
R-squared 92.61 87.01
Std. Deviation 13.78 16.05
Alpha -1.92 -1.03
Beta 0.98 1.1
Sharpe Ratio 0.87 0.91
Treynor Ratio 11.94 12.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Sharpe Ratio of 0.91 with a R-squared of 87.01 and a Treynor Ratio of 12.98. Its Alpha is -1.03 while IWP’s Standard Deviation is 16.05. Furthermore, the fund has a Mean Return of 1.27 and a Beta of 1.1.

VTV’s Mean Return is 0.22 points lower than that of IWP and its R-squared is 5.60 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than IWP. The Alpha and Beta of VTV are 0.89 points lower and 0.12 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. IWP - Annual Returns

Year VTV IWP
2020 2.23% 35.29%
2019 25.85% 35.14%
2018 -5.39% -4.95%
2017 17.12% 24.98%
2016 16.88% 7.15%
2015 -0.89% -0.39%
2014 13.19% 11.68%
2013 33.03% 35.44%
2012 15.19% 15.62%
2011 1.16% -1.82%
2010 14.45% 26.1%

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 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

VTV vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $33,163 12.07%
IWP $10,000 $50,191 16.75%

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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.

VTV’s CAGR is 4.67 percentage points lower than that of IWP and as a result, would have yielded $17,028 less on a $10,000 investment. Thus, VTV performed worse than IWP by 4.67% annually.


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