VTV vs. IWR: What’s The Difference?

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

The expense ratio of VTV is 0.15 percentage points lower than IWR’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 IWR over the past ten years.

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

Summary

VTV IWR
Name Vanguard Value Index Fund ETF Shares iShares Russell Mid-Cap ETF
Category Large Value Mid-Cap Blend
Issuer Vanguard iShares
AUM 125.77B 29.84B
Avg. Return 12.07% 14.15%
Div. Yield 2.15% 0.99%
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 Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

VTV’s dividend yield is 1.16% higher than that of IWR (2.15% vs. 0.99%). Also, VTV yielded on average 2.08% less per year over the past decade (12.07% vs. 14.15%). The expense ratio of VTV is 0.15 percentage points lower than IWR’s (0.04% vs. 0.19%).

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Fund Composition

Industry Exposure

VTV vs. IWR - Industry Exposure

VTV IWR
Technology 7.86% 19.67%
Industrials 12.61% 14.54%
Energy 5.59% 3.48%
Communication Services 5.49% 4.64%
Utilities 5.37% 4.46%
Healthcare 19.84% 11.76%
Consumer Defensive 10.72% 3.82%
Real Estate 3.01% 8.31%
Financial Services 22.81% 11.64%
Consumer Cyclical 3.79% 13.59%
Basic Materials 2.91% 4.1%

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 ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

VTV is 11.17% more exposed to the Financial Services sector than IWR (22.81% vs 11.64%). VTV’s exposure to Healthcare and Industrials stocks is 8.08% higher and 1.93% lower respectively (19.84% vs. 11.76% and 12.61% vs. 14.54%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 14.19% less of the fund’s holdings compared to IWR (12.17% vs. 26.36%).

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%.

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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Risk Analysis

VTV IWR
Mean Return 1.05 1.17
R-squared 92.61 91.52
Std. Deviation 13.78 15.66
Alpha -1.92 -2.8
Beta 0.98 1.11
Sharpe Ratio 0.87 0.86
Treynor Ratio 11.94 11.72

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

The iShares Russell Mid-Cap ETF (IWR) has a Treynor Ratio of 11.72 with a Standard Deviation of 15.66 and a Alpha of -2.8. Its Beta is 1.11 while IWR’s Mean Return is 1.17. Furthermore, the fund has a Sharpe Ratio of 0.86 and a R-squared of 91.52.

VTV’s Mean Return is 0.12 points lower than that of IWR and its R-squared is 1.09 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than IWR. The Alpha and Beta of VTV are 0.88 points higher and 0.13 points lower than IWR’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. IWR - Annual Returns

Year VTV IWR
2020 2.23% 16.91%
2019 25.85% 30.31%
2018 -5.39% -9.13%
2017 17.12% 18.32%
2016 16.88% 13.58%
2015 -0.89% -2.57%
2014 13.19% 13.03%
2013 33.03% 34.5%
2012 15.19% 17.13%
2011 1.16% -1.67%
2010 14.45% 25.25%

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 IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% respectively.

Portfolio Growth

VTV vs. IWR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $33,163 12.07%
IWR $10,000 $39,751 14.15%

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 IWR, the end total would have been $39,751. This equates to a $29,751 profit over 11 years and a compound annual growth rate (CAGR) of 14.15%.

VTV’s CAGR is 2.08 percentage points lower than that of IWR and as a result, would have yielded $6,588 less on a $10,000 investment. Thus, VTV performed worse than IWR by 2.08% annually.


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