Skip to content

EEM vs. IVE: What’s The Difference?

The iShares MSCI Emerging Markets ETF (EEM) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. EEM is a iShares Diversified Emerging Mkts fund and IVE is a iShares Large Value fund. So, what’s the difference between EEM and IVE? And which fund is better?

The expense ratio of EEM is 0.50 percentage points higher than IVE’s (0.68% vs. 0.18%). EEM also has a higher exposure to the technology sector and a higher standard deviation. Overall, EEM has provided lower returns than IVE over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

EEMIVE
NameiShares MSCI Emerging Markets ETFiShares S&P 500 Value ETF
CategoryDiversified Emerging MktsLarge Value
IssueriSharesiShares
AUM30.33B22.4B
Avg. Return5.47%11.68%
Div. Yield1.48%1.88%
Expense Ratio0.68%0.18%

The iShares MSCI Emerging Markets ETF (EEM) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 30.33B total assets under management and has yielded an average annual return of 5.47% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.68%.

The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

EEM’s dividend yield is 0.40% lower than that of IVE (1.48% vs. 1.88%). Also, EEM yielded on average 6.21% less per year over the past decade (5.47% vs. 11.68%). The expense ratio of EEM is 0.50 percentage points higher than IVE’s (0.68% vs. 0.18%).

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

EEM vs. IVE - Industry Exposure

EEMIVE
Technology21.36%9.41%
Industrials4.61%12.19%
Energy5.17%5.43%
Communication Services11.76%6.4%
Utilities1.99%4.82%
Healthcare5.06%15.4%
Consumer Defensive5.45%9.23%
Real Estate1.98%4.38%
Financial Services18.39%22.06%
Consumer Cyclical15.16%7.68%
Basic Materials9.07%2.99%

The iShares MSCI Emerging Markets ETF (EEM) has the most exposure to the Technology sector at 21.36%. This is followed by Financial Services and Consumer Cyclical at 18.39% and 15.16% respectively. Utilities (1.99%), Industrials (4.61%), and Healthcare (5.06%) only make up 11.66% of the fund’s total assets.

EEM’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.17%, 5.45%, 9.07%, 11.76%, and 15.16%.

The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

EEM is 11.95% more exposed to the Technology sector than IVE (21.36% vs 9.41%). EEM’s exposure to Financial Services and Consumer Cyclical stocks is 3.67% lower and 7.48% higher respectively (18.39% vs. 22.06% and 15.16% vs. 7.68%). In total, Utilities, Industrials, and Healthcare also make up 20.75% less of the fund’s holdings compared to IVE (11.66% vs. 32.41%).

Holdings

EEM - Holdings

EEM HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd6.36%
Alibaba Group Holding Ltd Ordinary Shares4.58%
Tencent Holdings Ltd4.41%
Samsung Electronics Co Ltd4.05%
Meituan1.24%
Vale SA1.04%
Naspers Ltd Class N1.04%
Reliance Industries Ltd Shs Dematerialised0.97%
Infosys Ltd0.92%
China Construction Bank Corp Class H0.83%

EEM’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Alibaba Group Holding Ltd Ordinary Shares, Tencent Holdings Ltd, Samsung Electronics Co Ltd, and Meituan at 6.36%, 4.58%, 4.41%, 4.05%, and 1.24%.

Vale SA (1.04%), Naspers Ltd Class N (1.04%), and Reliance Industries Ltd Shs Dematerialised (0.97%) have a slightly smaller but still significant weight. Infosys Ltd and China Construction Bank Corp Class H are also represented in the EEM’s holdings at 0.92% and 0.83%.

IVE - Holdings

IVE HoldingsWeight
Berkshire Hathaway Inc Class B3.05%
JPMorgan Chase & Co2.65%
The Walt Disney Co1.85%
Bank of America Corp1.67%
Johnson & Johnson1.57%
Exxon Mobil Corp1.41%
Pfizer Inc1.38%
Cisco Systems Inc1.35%
Verizon Communications Inc1.33%
Intel Corp1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

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

EEMIVE
Mean Return0.381.05
R-squared83.592.08
Std. Deviation17.7914.3
Alpha-2.33-2.9
Beta1.081.01
Sharpe Ratio0.220.83
Treynor Ratio2.2211.41

The iShares MSCI Emerging Markets ETF (EEM) has a Mean Return of 0.38 with a Standard Deviation of 17.79 and a Treynor Ratio of 2.22. Its R-squared is 83.5 while EEM’s Alpha is -2.33. Furthermore, the fund has a Beta of 1.08 and a Sharpe Ratio of 0.22.

The iShares S&P 500 Value ETF (IVE) has a Standard Deviation of 14.3 with a Alpha of -2.9 and a R-squared of 92.08. Its Mean Return is 1.05 while IVE’s Beta is 1.01. Furthermore, the fund has a Treynor Ratio of 11.41 and a Sharpe Ratio of 0.83.

EEM’s Mean Return is 0.67 points lower than that of IVE and its R-squared is 8.58 points lower. With a Standard Deviation of 17.79, EEM is slightly more volatile than IVE. The Alpha and Beta of EEM are 0.57 points higher and 0.07 points higher than IVE’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

EEM vs. IVE - Annual Returns

YearEEMIVE
202017.56%1.24%
201917.67%31.71%
2018-14.98%-9.09%
201736.42%15.19%
201610.51%17.17%
2015-15.41%-3.24%
2014-2.82%12.14%
2013-3.14%31.69%
201217.32%17.45%
2011-18.87%-0.63%
201015.93%14.9%

EEM had its best year in 2017 with an annual return of 36.42%. EEM’s worst year over the past decade yielded -18.87% and occurred in 2011. In most years the iShares MSCI Emerging Markets ETF provided moderate returns such as in 2014, 2016, and 2010 where annual returns amounted to -2.82%, 10.51%, and 15.93% respectively.

The year 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

EEM vs. IVE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
EEM$10,000$15,5785.47%
IVE$10,000$31,35011.68%

A $10,000 investment in EEM would have resulted in a final balance of $15,578. This is a profit of $5,578 over 11 years and amounts to a compound annual growth rate (CAGR) of 5.47%.

With a $10,000 investment in IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

EEM’s CAGR is 6.21 percentage points lower than that of IVE and as a result, would have yielded $15,772 less on a $10,000 investment. Thus, EEM performed worse than IVE by 6.21% 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)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) 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!

3) 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!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

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

Leave a Reply

Your email address will not be published.