IWM vs VBR
iShares Russell 2000 ETF vs Vanguard Morningstar Small-Cap Value ETF
Quick Verdict
VBR has a lower expense ratio. IWM delivered stronger 1-year returns. IWM offers more diversification with 1,996 holdings.
Side-by-Side Comparison
| Metric | IWM | VBR | Winner |
|---|---|---|---|
| Expense Ratio | 0.19% | 0.05% | |
| AUM | $81.2B | $37.3B | |
| Dividend Yield | 0.91% | 1.76% | |
| Holdings | 1,996 | 847 | |
| YTD Return | +17.28% | +14.80% | |
| 1Y Return | +25.52% | +19.71% | |
| 3Y Return (annualized) | +17.30% | +16.03% | |
| 5Y Return (annualized) | +6.34% | +9.16% | |
| Volatility (annualized) | 19.9% | 19.0% | |
| Max Drawdown | -59.9% | -64.0% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 22, 2000 | Jan 26, 2004 |
IWM vs VBR Performance
iShares Russell 2000 ETF (IWM) is a ETF from iShares by BlackRock (US) and Vanguard Morningstar Small-Cap Value ETF (VBR) is a ETF from Vanguard (US). Over the past year IWM returned +25.52% while VBR returned +19.71%. Year to date, IWM is up 17.28% versus a gain of 14.80% for VBR.
Over three years, IWM compounded at +17.30% per year against +16.03% for VBR; over five years the annualized figures are +6.34% and +9.16% respectively. Across the full 23-year window we track, VBR has the edge at +7.88% annualized vs +7.56%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IWM has been the more volatile fund, with annualized monthly volatility of 19.9% compared with 19.0% for VBR. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -59.9% for IWM and -64.0% for VBR. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.97. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
IWM charges 0.19% per year while VBR charges 0.05%. On a $10,000 position that is $19 vs $5 annually, a gap of $14 per year that compounds over a long holding period. On income, IWM currently yields 0.91% against 1.76% for VBR.
Holdings Overlap
IWM and VBR share 390 holdings out of 2041 unique holdings combined, representing a 23.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IWM or VBR?
IWM has an expense ratio of 0.19% while VBR charges 0.05%. VBR is the cheaper option. On a $10,000 investment, that is $14 per year of difference.
Which performed better, IWM or VBR?
Over the past year IWM returned +25.52% vs +19.71% for VBR, so IWM leads on 1-year performance. Over the longest common window we track (23 years), IWM annualized +7.56% vs +7.88% for VBR. Past performance does not guarantee future results.
Which is riskier, IWM or VBR?
IWM has been the more volatile fund at 19.9% annualized versus 19.0% for VBR. Worst drawdown: IWM -59.9% vs VBR -64.0%.
Should I hold both IWM and VBR?
IWM and VBR have a monthly-return correlation of 0.97, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between IWM and VBR?
IWM and VBR share 390 common holdings with a 23.5% weight overlap. Combined, they hold 2041 unique securities.
Which pays a higher dividend, IWM or VBR?
IWM yields 0.91% while VBR yields 1.76%, so VBR currently pays the higher dividend yield.
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