The Vanguard Extended Market Index Fund ETF Shares (VXF) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and IWN is a iShares Small Value fund. So, what’s the difference between VXF and IWN? And which fund is better?
The expense ratio of VXF is 0.18 percentage points lower than IWN’s (0.06% vs. 0.24%). VXF also has a higher exposure to the technology sector and a lower standard deviation. Overall, VXF has provided higher returns than IWN over the past 11 years.
In this article, we’ll compare VXF vs. IWN. We’ll look at risk metrics and holdings, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss VXF’s and IWN’s portfolio growth, fund composition, and performance and examine how these affect their overall returns.
Summary
| VXF | IWN | |
| Name | Vanguard Extended Market Index Fund ETF Shares | iShares Russell 2000 Value ETF |
| Category | Mid-Cap Growth | Small Value |
| Issuer | Vanguard | iShares |
| AUM | 114.53B | 15.48B |
| Avg. Return | 15.47% | 10.96% |
| Div. Yield | 1.19% | 1.26% |
| Expense Ratio | 0.06% | 0.24% |
The Vanguard Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
The iShares Russell 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.
VXF’s dividend yield is 0.07% lower than that of IWN (1.19% vs. 1.26%). Also, VXF yielded on average 4.51% more per year over the past decade (15.47% vs. 10.96%). The expense ratio of VXF is 0.18 percentage points lower than IWN’s (0.06% vs. 0.24%).
Fund Composition
Industry Exposure
| VXF | IWN | |
| Technology | 23.61% | 6.02% |
| Industrials | 11.31% | 14.58% |
| Energy | 2.46% | 5.84% |
| Communication Services | 7.29% | 4.17% |
| Utilities | 1.65% | 4.69% |
| Healthcare | 15.25% | 10.94% |
| Consumer Defensive | 3.09% | 3.77% |
| Real Estate | 8.16% | 14.36% |
| Financial Services | 12.56% | 22.97% |
| Consumer Cyclical | 11.35% | 8.39% |
| Basic Materials | 3.26% | 4.29% |
The Vanguard Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
The iShares Russell 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.
IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.
VXF is 17.59% more exposed to the Technology sector than IWN (23.61% vs 6.02%). VXF’s exposure to Healthcare and Financial Services stocks is 4.31% higher and 10.41% lower respectively (15.25% vs. 10.94% and 12.56% vs. 22.97%). In total, Energy, Consumer Defensive, and Basic Materials also make up 5.09% less of the fund’s holdings compared to IWN (8.81% vs. 13.90%).
Holdings
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
| IWN Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 1.06% |
| Tenet Healthcare Corp | 0.47% |
| Stag Industrial Inc | 0.47% |
| Ovintiv Inc | 0.45% |
| EMCOR Group Inc | 0.42% |
| Valley National Bancorp | 0.37% |
| Chesapeake Energy Corp Ordinary Shares – New | 0.37% |
| Agree Realty Corp | 0.36% |
| Macy’s Inc | 0.35% |
| Essent Group Ltd | 0.35% |
IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.
Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.
Risk Analysis
| VXF | IWN | |
| Mean Return | 1.24 | 1.01 |
| R-squared | 85.73 | 72.64 |
| Std. Deviation | 18.04 | 19.28 |
| Alpha | -3.26 | -6.32 |
| Beta | 1.23 | 1.21 |
| Sharpe Ratio | 0.79 | 0.59 |
| Treynor Ratio | 10.92 | 8.3 |
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Mean Return of 1.24 with a Standard Deviation of 18.04 and a Alpha of -3.26. Its Beta is 1.23 while VXF’s Sharpe Ratio is 0.79. Furthermore, the fund has a R-squared of 85.73 and a Treynor Ratio of 10.92.
The iShares Russell 2000 Value ETF (IWN) has a Standard Deviation of 19.28 with a Treynor Ratio of 8.3 and a R-squared of 72.64. Its Beta is 1.21 while IWN’s Alpha is -6.32. Furthermore, the fund has a Sharpe Ratio of 0.59 and a Mean Return of 1.01.
VXF’s Mean Return is 0.23 points higher than that of IWN and its R-squared is 13.09 points higher. With a Standard Deviation of 18.04, VXF is slightly less volatile than IWN. The Alpha and Beta of VXF are 3.06 points higher and 0.02 points higher than IWN’s Alpha and Beta.
Performance
Annual Returns
| Year | VXF | IWN |
| 2020 | 32.19% | 4.5% |
| 2019 | 28.04% | 22.17% |
| 2018 | -9.37% | -12.94% |
| 2017 | 18.1% | 7.73% |
| 2016 | 16.16% | 31.64% |
| 2015 | -3.26% | -7.53% |
| 2014 | 7.55% | 4.13% |
| 2013 | 38.37% | 34.3% |
| 2012 | 18.48% | 17.92% |
| 2011 | -3.61% | -5.64% |
| 2010 | 27.55% | 24.29% |
VXF had its best year in 2013 with an annual return of 38.37%. VXF’s worst year over the past decade yielded -9.37% and occurred in 2018. In most years the Vanguard Extended Market Index Fund ETF Shares provided moderate returns such as in 2016, 2017, and 2012 where annual returns amounted to 16.16%, 18.1%, and 18.48% respectively.
The year 2013 was the strongest year for IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXF | $10,000 | $44,130 | 15.47% |
| IWN | $10,000 | $28,189 | 10.96% |
A $10,000 investment in VXF would have resulted in a final balance of $44,130. This is a profit of $34,130 over 11 years and amounts to a compound annual growth rate (CAGR) of 15.47%.
With a $10,000 investment in IWN, the end total would have been $28,189. This equates to a $18,189 profit over 11 years and a compound annual growth rate (CAGR) of 10.96%.
VXF’s CAGR is 4.51 percentage points higher than that of IWN and as a result, would have yielded $15,941 more on a $10,000 investment. Thus, VXF outperformed IWN by 4.51% annually.
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