The Vanguard Growth Index Fund ETF Shares (VUG) and the iShares Russell 1000 Growth ETF (IWF) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and IWF is a iShares Large Growth fund. So, what’s the difference between VUG and IWF? And which fund is better?
The expense ratio of VUG is 0.15 percentage points lower than IWF’s (0.04% vs. 0.19%). VUG also has a lower exposure to the technology sector and a higher standard deviation. Overall, VUG has provided lower returns than IWF over the past ten years.
In this article, we’ll compare VUG vs. IWF. We’ll look at fund composition and holdings, as well as at their risk metrics and performance. Moreover, I’ll also discuss VUG’s and IWF’s portfolio growth, industry exposure, and annual returns and examine how these affect their overall returns.
Summary
| VUG | IWF | |
| Name | Vanguard Growth Index Fund ETF Shares | iShares Russell 1000 Growth ETF |
| Category | Large Growth | Large Growth |
| Issuer | Vanguard | iShares |
| AUM | 165.53B | 72.16B |
| Avg. Return | 17.58% | 17.72% |
| Div. Yield | 0.57% | 0.52% |
| Expense Ratio | 0.04% | 0.19% |
The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% 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%.
VUG’s dividend yield is 0.05% higher than that of IWF (0.57% vs. 0.52%). Also, VUG yielded on average 0.15% less per year over the past decade (17.58% vs. 17.72%). The expense ratio of VUG is 0.15 percentage points lower than IWF’s (0.04% vs. 0.19%).
Fund Composition
Industry Exposure
| VUG | IWF | |
| Technology | 39.05% | 39.29% |
| Industrials | 5.13% | 6.19% |
| Energy | 0.32% | 0.28% |
| Communication Services | 16.49% | 12.82% |
| Utilities | 0.0% | 0.03% |
| Healthcare | 8.09% | 9.23% |
| Consumer Defensive | 2.41% | 4.31% |
| Real Estate | 2.46% | 1.85% |
| Financial Services | 6.75% | 7.36% |
| Consumer Cyclical | 17.78% | 17.62% |
| Basic Materials | 1.52% | 1.01% |
The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.
VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.
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%.
VUG is 0.24% less exposed to the Technology sector than IWF (39.05% vs 39.29%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 0.16% higher and 3.67% higher respectively (17.78% vs. 17.62% and 16.49% vs. 12.82%). In total, Energy, Basic Materials, and Consumer Defensive also make up 1.35% less of the fund’s holdings compared to IWF (4.25% vs. 5.60%).
Holdings
| VUG Holdings | Weight |
| Apple Inc | 10.13% |
| Microsoft Corp | 9.52% |
| Amazon.com Inc | 6.88% |
| Facebook Inc Class A | 3.89% |
| Alphabet Inc Class A | 3.43% |
| Alphabet Inc Class C | 3.22% |
| Tesla Inc | 2.44% |
| NVIDIA Corp | 2.21% |
| Visa Inc Class A | 1.78% |
| PayPal Holdings Inc | 1.6% |
VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.
Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.
| 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%.
Risk Analysis
| VUG | IWF | |
| Mean Return | 1.44 | 1.48 |
| R-squared | 92.48 | 92.93 |
| Std. Deviation | 14.76 | 14.42 |
| Alpha | 1.81 | 2.16 |
| Beta | 1.04 | 1.03 |
| Sharpe Ratio | 1.13 | 1.19 |
| Treynor Ratio | 16.13 | 17.1 |
The Vanguard Growth Index Fund ETF Shares (VUG) has a Treynor Ratio of 16.13 with a Sharpe Ratio of 1.13 and a Beta of 1.04. Its Alpha is 1.81 while VUG’s Mean Return is 1.44. Furthermore, the fund has a Standard Deviation of 14.76 and a R-squared of 92.48.
The iShares Russell 1000 Growth ETF (IWF) has a Treynor Ratio of 17.1 with a R-squared of 92.93 and a Sharpe Ratio of 1.19. Its Mean Return is 1.48 while IWF’s Beta is 1.03. Furthermore, the fund has a Standard Deviation of 14.42 and a Alpha of 2.16.
VUG’s Mean Return is 0.04 points lower than that of IWF and its R-squared is 0.45 points lower. With a Standard Deviation of 14.76, VUG is slightly more volatile than IWF. The Alpha and Beta of VUG are 0.35 points lower and 0.01 points higher than IWF’s Alpha and Beta.
Performance
Annual Returns
| Year | VUG | IWF |
| 2020 | 40.16% | 38.21% |
| 2019 | 37.26% | 36.08% |
| 2018 | -3.32% | -1.68% |
| 2017 | 27.8% | 29.96% |
| 2016 | 6.13% | 6.92% |
| 2015 | 3.32% | 5.48% |
| 2014 | 13.62% | 12.84% |
| 2013 | 32.38% | 33.19% |
| 2012 | 17.03% | 15.03% |
| 2011 | 1.87% | 2.47% |
| 2010 | 17.11% | 16.47% |
VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VUG | $10,000 | $54,735 | 17.58% |
| IWF | $10,000 | $55,920 | 17.72% |
A $10,000 investment in VUG would have resulted in a final balance of $54,735. This is a profit of $44,735 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.58%.
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%.
VUG’s CAGR is 0.15 percentage points lower than that of IWF and as a result, would have yielded $1,185 less on a $10,000 investment. Thus, VUG performed worse than IWF by 0.15% annually.
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