IWM vs VB: What’s The Difference? 2023
The iShares Russell 2000 ETF (IWM) and the Vanguard Small-Cap ETF (VB) are both interesting ETFs. IWM tracks Russell 2000 Index and VB tracks CRSP US Small Cap. So, what’s the difference between IWM vs VB? And which fund is better?
IWM vs VB: The expense ratio of IWM is 0.19% and VB is 0.05%. IWM’s biggest holding is Super Micro Computer Inc and VB’s biggest holding is Fair Isaac Corp. Overall, IWM has provided -1.07% Lower returns than VB over the past ten years.
In this article, we’ll compare IWM vs VB. We’ll look at holdings and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss IWM’s and VB’s industry exposure, risk metrics, fund composition and examine how these affect their overall returns.Looking for something else? Search below ETF vs ETF or any other topic you need!
Summary IWM vs VB
VB vs IWM Table
| BND | IUSB | |
| Name | iShares Russell 2000 ETF | Vanguard Small-Cap ETF |
| Category | Small Blend | Small Blend |
| Issuer | iShares | Vanguard |
| AUM | $48.91B | $112.94B |
| Avg. Return | 9.67% | 10.75% |
| Div. Yield | 1.62% | 1.64% |
| Expense Ratio | 0.19% | 0.05% |
The iShares Russell 2000 ETF (IWM) is a Russell 2000 Index fund that is issued by iShares. It currently has $48.91B total assets under management and has yielded an average annual return of 9.67% over the past 10 years. The fund has a dividend yield of 1.62% with an expense ratio of 0.19%.
The Vanguard Small-Cap ETF (VB) is a CRSP US Small Cap that is issued by Vanguard. It currently has $112.94B total assets under management and has yielded an average annual return of 10.75% over the past 10 years. The fund has a dividend yield of 1.64% with an expense ratio of 0.05%.
IWM’s dividend yield is Lower than that of VB (1.62% vs 1.64%). Also, IWM yielded on average -1.07% Lower per year over the past decade (9.67% vs 10.75%). The expense ratio of IWM is 0.14% percentage points Higher than VB’s (0.19% vs 0.05%).
Fund Composition IWM vs VB
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Industry Exposure Table vs IWM
Industry Chart
| IWM | VB | |
| Technology | 15.14% | 0.1616 |
| Industrials | 15.23% | 0.1866 |
| Energy | 5.90% | 0.0461 |
| Communication Services | 2.47% | 0.0227 |
| Utilities | 3.33% | 0.0291 |
| Healthcare | 17.75% | 0.1236 |
| Consumer Defensive | 4.40% | 0.0424 |
| Real Estate | 7.31% | 0.0825 |
| Financial Services | 13.27% | 0.1184 |
| Consumer Cyclical | 10.80% | 0.1231 |
| Basic Materials | 4.24% | 0.0413 |
The iShares Russell 2000 ETF (IWM) has the most exposure to the Healthcare sector at 17.75%. This is followed by Industrials and Technology at 15.23% and 15.14% respectively. Communication Services (2.47%), Utilities (3.33%), and Basic Materials (4.24%) only make up 10.04% of the fund’s total assets.
IWM’s middle weighted sectors is made up with moderate exposure to Consumer Defensive, Energy, Real Estate, Consumer Cyclical, and Financial Services stocks at 4.40%, 5.90%, 7.31%, 10.80%, and 13.27%.
The Vanguard Small-Cap ETF (VB) has the most exposure to the Industrials sector at 0.1866. This is followed by Technology and Healthcare at 0.1616 and 0.1236 respectively. Communication Services (0.0227), Utilities (0.0291), and Basic Materials (0.0413) only make up 0.0931 of the fund’s total assets.
VB’s middle weighted sectors is made up with moderate exposure to Consumer Defensive, Energy, Real Estate, Financial Services, and Consumer Cyclical stocks at 0.0424, 0.0461, 0.0825, 10.80%, and 13.27%.
IWM is 5.39% More exposed to the Healthcare sector than VB (17.75% vs 12.36%). IWM’s exposure to Industrials and Technology stocks is -3.43% Less and -1.02% Less respectively (15.23% vs. 18.66%) and (15.14% vs. 16.16%).
In total, IWM’s bottom three industries, Basic Materials, Utilities, and Communication Services also make up 0.73% Higher of the fund’s holdings compared to VB’s bottom three industries. (10.04% vs. 0.0931).
Holdings iShares Russell 2000 ETF (IWM)
| IWM Holdings | Weight |
| Super Micro Computer Inc | 0.47% |
| ShockWave Medical Inc | 0.44% |
| Inspire Medical Systems Inc | 0.37% |
| Apellis Pharmaceuticals Inc | 0.36% |
| EMCOR Group Inc | 0.35% |
| Saia Inc | 0.34% |
| Iridium Communications Inc | 0.34% |
| Karuna Therapeutics Inc | 0.33% |
| Texas Roadhouse Inc | 0.32% |
| Celsius Holdings Inc | 0.31% |
IWM’s Top Holdings are Super Micro Computer Inc, ShockWave Medical Inc, Inspire Medical Systems Inc, Apellis Pharmaceuticals Inc, and EMCOR Group Inc at 0.47%, 0.44%, 0.37%, 0.36%, and 0.35%.
Saia Inc (0.34%), Iridium Communications Inc (0.34%), and Karuna Therapeutics Inc (0.33%) have a slightly smaller but still significant weight. Texas Roadhouse Inc and Celsius Holdings Inc are also represented in the IWM’s holdings at 0.32% and 0.31%.
Holdings Vanguard Small-Cap ETF (VB)
| IWM Holdings | Weight |
| Fair Isaac Corp | 0.0043 |
| Builders FirstSource Inc | 0.0039 |
| Atmos Energy Corp | 0.0038 |
| Entegris Inc | 0.0036 |
| Targa Resources Corp | 0.0035 |
| IDEX Corp | 0.0034 |
| Exact Sciences Corp | 0.0033 |
| PTC Inc | 0.0033 |
| Bunge Ltd | 0.0032 |
| Liberty Formula One Group Registered Shs Series -C- Formula One | 0.0031 |
IWM’s Top Holdings are Fair Isaac Corp, Builders FirstSource Inc, Atmos Energy Corp, Entegris Inc, and Targa Resources Corp at 0.0043, 0.0039, 0.0038, 0.0036, and 0.0035.
IDEX Corp (0.0034), Exact Sciences Corp (0.0033), and PTC Inc (0.0033) have a slightly smaller but still significant weight. Bunge Ltd and Liberty Formula One Group Registered Shs Series -C- Formula One are also represented in the ’s holdings at 0.0032 and 0.0031.
Risk Analysis IWM vs VB
| SCHD | SDY | |
| Mean Return | 0.91 | 0.99 |
| R-squared | 69.59 | 78.12 |
| Std. Deviation | 21.53 | 20.08 |
| Alpha | -2.85 | -1.85 |
| Beta | 1 | 0.99 |
| Sharpe Ratio | 0.44 | 0.52 |
| Treynor Ratio | 7.65 | 8.98 |
The iShares Russell 2000 ETF has a Standard Deviation of 21.53 with a Alpha of -2.85 and a Treynor Ratio of 7.65. Its Sharpe Ratio is 0.44 while IWM’s Beta is 1. Furthermore, the fund has a Mean Return of 0.91 and a R-squared of 69.59.
The VB has a R-squared of 78.12 with a Mean Return of 0.99 and a Standard Deviation of 20.08. Its Sharpe Ratio is 0.52 while VB’s Alpha is -1.851. Furthermore, the fund has a Beta of 0.99 and a Treynor Ratio of 8.98.
Performance IWM vs VB
Annual Returns IWM vs VB
| Year | IWM | VB |
| 2022 | -20.48% | -0.1754 |
| 2021 | 14.54% | 0.1756 |
| 2020 | 20.03% | 0.1916 |
| 2019 | 25.39% | 0.2732 |
| 2018 | -11.11% | -0.0933 |
| 2017 | 14.59% | 0.1626 |
| 2016 | 21.60% | 0.1844 |
| 2015 | -4.47% | -0.0376 |
| 2014 | 5.03% | 0.0763 |
| 2013 | 38.69% | 0.377 |
| 2012 | 16.69% | 0.1829 |
| 2011 | -4.44% | -0.0278 |
IWM had its best year in 2013 with an annual return of 38.69%. IWM’s worst year over the past decade yielded -20.48% and occurred in 2022. In most years the iShares Russell 2000 ETF provided moderate returns such as in 2019, 2016, and 2020 where annual returns amounted to 31.35%, 12.17%, and 18.29% respectively.
The year 2013 was the strongest year for VB, returning 0.377 on an annual basis. The poorest year for VB in the last ten years was 2022, with a yield of -0.1754. Most years the Vanguard Small-Cap ETF has given investors modest returns, such as in 2019, 2020, and 2016, when gains were 27.32%, 19.16%, and 18.44% respectively.
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Performance Comparison IWM vs VB
| Fund | Initial Balance | Final Balance | CAGR |
| IWM | $10,000 | $23,191.82 | 9.80% |
| VB | $10,000 | $25,141.18 | 10.79% |
A $10,000 investment in IWM would have resulted in a final balance of $23,191.82. This is a profit of $13,191.82 over 10 years and amounts to a compound annual growth rate (CAGR) of 9.80%.
With a $10,000 investment in VB, the end total would have been $25,141.18. This equates to a $15,141.18 profit over 10 years and a compound annual growth rate (CAGR) of 10.79%.
VB’s CAGR is 0.99% Higher than that of IWM and as a result, would have yielded $1,949.36 More on a $10,000 investment. Thus, VB Overperformed IWM by $194.94 annually.
