DIA vs. IWN: What’s The Difference?

The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and IWN is a iShares Small Value fund. So, what’s the difference between DIA and IWN? And which fund is better?

The expense ratio of DIA is 0.08 percentage points lower than IWN’s (0.16% vs. 0.24%). DIA also has a lower exposure to the financial services sector and a lower standard deviation. Overall, DIA has provided higher returns than IWN over the past ten years.

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

Summary

DIA IWN
Name SPDR Dow Jones Industrial Average ETF Trust iShares Russell 2000 Value ETF
Category Large Value Small Value
Issuer SPDR State Street Global Advisors iShares
AUM 30.46B 15.48B
Avg. Return 13.35% 10.96%
Div. Yield 1.61% 1.26%
Expense Ratio 0.16% 0.24%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

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%.

DIA’s dividend yield is 0.35% higher than that of IWN (1.61% vs. 1.26%). Also, DIA yielded on average 2.39% more per year over the past decade (13.35% vs. 10.96%). The expense ratio of DIA is 0.08 percentage points lower than IWN’s (0.16% vs. 0.24%).

Fund Composition

Industry Exposure

DIA vs. IWN - Industry Exposure

DIA IWN
Technology 17.32% 6.02%
Industrials 16.7% 14.58%
Energy 2.0% 5.84%
Communication Services 4.42% 4.17%
Utilities 0.0% 4.69%
Healthcare 17.92% 10.94%
Consumer Defensive 6.3% 3.77%
Real Estate 0.0% 14.36%
Financial Services 20.68% 22.97%
Consumer Cyclical 13.44% 8.39%
Basic Materials 1.21% 4.29%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

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%.

DIA is 2.29% less exposed to the Financial Services sector than IWN (20.68% vs 22.97%). DIA’s exposure to Healthcare and Technology stocks is 6.98% higher and 11.30% higher respectively (17.92% vs. 10.94% and 17.32% vs. 6.02%). In total, Utilities, Basic Materials, and Energy also make up 11.61% less of the fund’s holdings compared to IWN (3.21% vs. 14.82%).

Holdings

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

IWN - Holdings

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

DIA IWN
Mean Return 1.13 1.01
R-squared 93.31 72.64
Std. Deviation 13.68 19.28
Alpha -0.94 -6.32
Beta 0.97 1.21
Sharpe Ratio 0.94 0.59
Treynor Ratio 13.07 8.3

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Alpha of -0.94 with a Treynor Ratio of 13.07 and a R-squared of 93.31. Its Beta is 0.97 while DIA’s Sharpe Ratio is 0.94. Furthermore, the fund has a Standard Deviation of 13.68 and a Mean Return of 1.13.

The iShares Russell 2000 Value ETF (IWN) has a Mean Return of 1.01 with a Sharpe Ratio of 0.59 and a R-squared of 72.64. Its Alpha is -6.32 while IWN’s Standard Deviation is 19.28. Furthermore, the fund has a Treynor Ratio of 8.3 and a Beta of 1.21.

DIA’s Mean Return is 0.12 points higher than that of IWN and its R-squared is 20.67 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than IWN. The Alpha and Beta of DIA are 5.38 points higher and 0.24 points lower than IWN’s Alpha and Beta.

Performance

Annual Returns

DIA vs. IWN - Annual Returns

Year DIA IWN
2020 9.63% 4.5%
2019 25.09% 22.17%
2018 -3.6% -12.94%
2017 27.97% 7.73%
2016 16.28% 31.64%
2015 0.1% -7.53%
2014 9.88% 4.13%
2013 29.41% 34.3%
2012 10.04% 17.92%
2011 8.21% -5.64%
2010 13.87% 24.29%

DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% 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

DIA vs. IWN - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $37,965 13.35%
IWN $10,000 $28,189 10.96%

A $10,000 investment in DIA would have resulted in a final balance of $37,965. This is a profit of $27,965 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

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%.

DIA’s CAGR is 2.39 percentage points higher than that of IWN and as a result, would have yielded $9,776 more on a $10,000 investment. Thus, DIA outperformed IWN by 2.39% annually.


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