The Vanguard Extended Market Index Fund ETF Shares (VXF) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between VXF and IWS? And which fund is better?
The expense ratio of VXF is 0.17 percentage points lower than IWS’s (0.06% vs. 0.23%). VXF also has a higher exposure to the technology sector and a higher standard deviation. Overall, VXF has provided higher returns than IWS over the past 11 years.
In this article, we’ll compare VXF vs. IWS. We’ll look at performance and annual returns, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss VXF’s and IWS’s portfolio growth, industry exposure, and holdings and examine how these affect their overall returns.
|Name||Vanguard Extended Market Index Fund ETF Shares||iShares Russell Mid-Cap Value ETF|
|Category||Mid-Cap Growth||Mid-Cap Value|
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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
VXF’s dividend yield is 0.15% lower than that of IWS (1.19% vs. 1.34%). Also, VXF yielded on average 3.13% more per year over the past decade (15.47% vs. 12.35%). The expense ratio of VXF is 0.17 percentage points lower than IWS’s (0.06% vs. 0.23%).
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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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.
IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.
VXF is 12.22% more exposed to the Technology sector than IWS (23.61% vs 11.39%). VXF’s exposure to Healthcare and Financial Services stocks is 6.69% higher and 3.19% lower respectively (15.25% vs. 8.56% and 12.56% vs. 15.75%). In total, Energy, Consumer Defensive, and Basic Materials also make up 6.06% less of the fund’s holdings compared to IWS (8.81% vs. 14.87%).
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|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%.
|Marvell Technology Inc||0.69%|
|IHS Markit Ltd||0.62%|
|Prudential Financial Inc||0.56%|
|Otis Worldwide Corp Ordinary Shares||0.54%|
|International Flavors & Fragrances Inc||0.53%|
|Xcel Energy Inc||0.52%|
|Motorola Solutions Inc||0.52%|
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
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The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Standard Deviation of 18.04 with a Sharpe Ratio of 0.79 and a Mean Return of 1.24. Its Alpha is -3.26 while VXF’s Treynor Ratio is 10.92. Furthermore, the fund has a R-squared of 85.73 and a Beta of 1.23.
The iShares Russell Mid-Cap Value ETF (IWS) has a Treynor Ratio of 10.3 with a R-squared of 87.04 and a Beta of 1.1. Its Mean Return is 1.06 while IWS’s Alpha is -4.11. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Standard Deviation of 16.03.
VXF’s Mean Return is 0.18 points higher than that of IWS and its R-squared is 1.31 points lower. With a Standard Deviation of 18.04, VXF is slightly more volatile than IWS. The Alpha and Beta of VXF are 0.85 points higher and 0.13 points higher than IWS’s Alpha and Beta.
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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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.
VXF’s CAGR is 3.13 percentage points higher than that of IWS and as a result, would have yielded $11,047 more on a $10,000 investment. Thus, VXF outperformed IWS by 3.13% annually.
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