VXF vs. IWP: What’s The Difference?

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

The expense ratio of VXF is 0.18 percentage points lower than IWP’s (0.06% vs. 0.24%). VXF also has a lower exposure to the technology sector and a higher standard deviation. Overall, VXF has provided lower returns than IWP over the past 11 years.

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

Summary

VXF IWP
Name Vanguard Extended Market Index Fund ETF Shares iShares Russell Mid-Cap Growth ETF
Category Mid-Cap Growth Mid-Cap Growth
Issuer Vanguard iShares
AUM 114.53B 15.7B
Avg. Return 15.47% 16.75%
Div. Yield 1.19% 0.26%
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 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%.

VXF’s dividend yield is 0.93% higher than that of IWP (1.19% vs. 0.26%). Also, VXF yielded on average 1.28% less per year over the past decade (15.47% vs. 16.75%). The expense ratio of VXF is 0.18 percentage points lower than IWP’s (0.06% vs. 0.24%).

Fund Composition

Industry Exposure

VXF vs. IWP - Industry Exposure

VXF IWP
Technology 23.61% 33.88%
Industrials 11.31% 14.09%
Energy 2.46% 1.51%
Communication Services 7.29% 6.32%
Utilities 1.65% 0.16%
Healthcare 15.25% 16.79%
Consumer Defensive 3.09% 2.32%
Real Estate 8.16% 2.46%
Financial Services 12.56% 4.52%
Consumer Cyclical 11.35% 16.09%
Basic Materials 3.26% 1.86%

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 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%.

VXF is 10.27% less exposed to the Technology sector than IWP (23.61% vs 33.88%). VXF’s exposure to Healthcare and Financial Services stocks is 1.54% lower and 8.04% higher respectively (15.25% vs. 16.79% and 12.56% vs. 4.52%). In total, Energy, Consumer Defensive, and Basic Materials also make up 3.12% more of the fund’s holdings compared to IWP (8.81% vs. 5.69%).

Holdings

VXF - 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%.

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%.

Risk Analysis

VXF IWP
Mean Return 1.24 1.27
R-squared 85.73 87.01
Std. Deviation 18.04 16.05
Alpha -3.26 -1.03
Beta 1.23 1.1
Sharpe Ratio 0.79 0.91
Treynor Ratio 10.92 12.98

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Sharpe Ratio of 0.79 with a Standard Deviation of 18.04 and a Beta of 1.23. Its Mean Return is 1.24 while VXF’s R-squared is 85.73. Furthermore, the fund has a Treynor Ratio of 10.92 and a Alpha of -3.26.

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

VXF’s Mean Return is 0.03 points lower than that of IWP and its R-squared is 1.28 points lower. With a Standard Deviation of 18.04, VXF is slightly more volatile than IWP. The Alpha and Beta of VXF are 2.23 points lower and 0.13 points higher than IWP’s Alpha and Beta.

Performance

Annual Returns

VXF vs. IWP - Annual Returns

Year VXF IWP
2020 32.19% 35.29%
2019 28.04% 35.14%
2018 -9.37% -4.95%
2017 18.1% 24.98%
2016 16.16% 7.15%
2015 -3.26% -0.39%
2014 7.55% 11.68%
2013 38.37% 35.44%
2012 18.48% 15.62%
2011 -3.61% -1.82%
2010 27.55% 26.1%

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 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

VXF vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VXF $10,000 $44,130 15.47%
IWP $10,000 $50,191 16.75%

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 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%.

VXF’s CAGR is 1.28 percentage points lower than that of IWP and as a result, would have yielded $6,061 less on a $10,000 investment. Thus, VXF performed worse than IWP by 1.28% annually.


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