DIA vs. IWS: What’s The Difference?

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

The expense ratio of DIA is 0.07 percentage points lower than IWS’s (0.16% vs. 0.23%). DIA also has a higher exposure to the financial services sector and a lower standard deviation. Overall, DIA has provided higher returns than IWS over the past ten years.

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

Summary

DIA IWS
Name SPDR Dow Jones Industrial Average ETF Trust iShares Russell Mid-Cap Value ETF
Category Large Value Mid-Cap Value
Issuer SPDR State Street Global Advisors iShares
AUM 30.46B 14.24B
Avg. Return 13.35% 12.35%
Div. Yield 1.61% 1.34%
Expense Ratio 0.16% 0.23%

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 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%.

DIA’s dividend yield is 0.27% higher than that of IWS (1.61% vs. 1.34%). Also, DIA yielded on average 1.01% more per year over the past decade (13.35% vs. 12.35%). The expense ratio of DIA is 0.07 percentage points lower than IWS’s (0.16% vs. 0.23%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

DIA vs. IWS - Industry Exposure

DIA IWS
Technology 17.32% 11.39%
Industrials 16.7% 14.6%
Energy 2.0% 4.71%
Communication Services 4.42% 4.08%
Utilities 0.0% 6.97%
Healthcare 17.92% 8.56%
Consumer Defensive 6.3% 4.76%
Real Estate 0.0% 11.71%
Financial Services 20.68% 15.75%
Consumer Cyclical 13.44% 12.07%
Basic Materials 1.21% 5.4%

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 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%.

DIA is 4.93% more exposed to the Financial Services sector than IWS (20.68% vs 15.75%). DIA’s exposure to Healthcare and Technology stocks is 9.36% higher and 5.93% higher respectively (17.92% vs. 8.56% and 17.32% vs. 11.39%). In total, Utilities, Basic Materials, and Energy also make up 13.87% less of the fund’s holdings compared to IWS (3.21% vs. 17.08%).

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%.

IWS - Holdings

IWS Holdings Weight
Twitter Inc 0.69%
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%
Aptiv PLC 0.52%
Aflac 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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

DIA IWS
Mean Return 1.13 1.06
R-squared 93.31 87.04
Std. Deviation 13.68 16.03
Alpha -0.94 -4.11
Beta 0.97 1.1
Sharpe Ratio 0.94 0.75
Treynor Ratio 13.07 10.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a R-squared of 87.04 with a Alpha of -4.11 and a Mean Return of 1.06. Its Beta is 1.1 while IWS’s Treynor Ratio is 10.3. Furthermore, the fund has a Standard Deviation of 16.03 and a Sharpe Ratio of 0.75.

DIA’s Mean Return is 0.07 points higher than that of IWS and its R-squared is 6.27 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than IWS. The Alpha and Beta of DIA are 3.17 points higher and 0.13 points lower than IWS’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).

Performance

Annual Returns

DIA vs. IWS - Annual Returns

Year DIA IWS
2020 9.63% 4.76%
2019 25.09% 26.78%
2018 -3.6% -12.36%
2017 27.97% 13.1%
2016 16.28% 19.69%
2015 0.1% -4.93%
2014 9.88% 14.49%
2013 29.41% 33.11%
2012 10.04% 18.27%
2011 8.21% -1.55%
2010 13.87% 24.46%

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 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.

Portfolio Growth

DIA vs. IWS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $37,965 13.35%
IWS $10,000 $33,083 12.35%

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 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%.

DIA’s CAGR is 1.01 percentage points higher than that of IWS and as a result, would have yielded $4,882 more on a $10,000 investment. Thus, DIA outperformed IWS by 1.01% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply