IAU vs. ACWI: What’s The Difference?

The iShares Gold Trust (IAU) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. IAU is a iShares N/A fund and ACWI is a iShares N/A fund. So, what’s the difference between IAU and ACWI? And which fund is better?

The expense ratio of IAU is 0.07 percentage points lower than ACWI’s (0.25% vs. 0.32%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than ACWI over the past 11 years.

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

Summary

IAU ACWI
Name iShares Gold Trust iShares MSCI ACWI ETF
Category N/A N/A
Issuer iShares iShares
AUM 28.61B 16.85B
Avg. Return 6.03% 10.21%
Div. Yield 0.0% 1.39%
Expense Ratio 0.25% 0.32%

The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

IAU’s dividend yield is 1.39% lower than that of ACWI (0.0% vs. 1.39%). Also, IAU yielded on average 4.18% less per year over the past decade (6.03% vs. 10.21%). The expense ratio of IAU is 0.07 percentage points lower than ACWI’s (0.25% vs. 0.32%).

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Fund Composition

Industry Exposure

IAU vs. ACWI - Industry Exposure

IAU ACWI
Technology 0.0% 20.41%
Industrials 0.0% 9.65%
Energy 0.0% 3.48%
Communication Services 0.0% 9.87%
Utilities 0.0% 2.61%
Healthcare 0.0% 11.74%
Consumer Defensive 0.0% 7.15%
Real Estate 0.0% 2.75%
Financial Services 0.0% 15.58%
Consumer Cyclical 0.0% 12.01%
Basic Materials 0.0% 4.73%

The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

IAU is 20.41% less exposed to the Technology sector than ACWI (0.0% vs 20.41%). IAU’s exposure to Industrials and Energy stocks is 9.65% lower and 3.48% lower respectively (0.0% vs. 9.65% and 0.0% vs. 3.48%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 30.34% less of the fund’s holdings compared to ACWI (0.00% vs. 30.34%).

Holdings

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
JPMorgan Chase & Co 0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

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Risk Analysis

IAU ACWI
Mean Return 0.23 0.89
R-squared 16.03 99.96
Std. Deviation 16.97 14.05
Alpha 4.16 0.15
Beta 0.48 1
Sharpe Ratio 0.13 0.71
Treynor Ratio 1.5 9.45

The iShares Gold Trust (IAU) has a R-squared of 16.03 with a Mean Return of 0.23 and a Beta of 0.48. Its Treynor Ratio is 1.5 while IAU’s Alpha is 4.16. Furthermore, the fund has a Sharpe Ratio of 0.13 and a Standard Deviation of 16.97.

The iShares MSCI ACWI ETF (ACWI) has a Standard Deviation of 14.05 with a Beta of 1 and a R-squared of 99.96. Its Mean Return is 0.89 while ACWI’s Sharpe Ratio is 0.71. Furthermore, the fund has a Treynor Ratio of 9.45 and a Alpha of 0.15.

IAU’s Mean Return is 0.66 points lower than that of ACWI and its R-squared is 83.93 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than ACWI. The Alpha and Beta of IAU are 4.01 points higher and 0.52 points lower than ACWI’s Alpha and Beta.

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Performance

Annual Returns

IAU vs. ACWI - Annual Returns

Year IAU ACWI
2020 23.86% 16.38%
2019 18.54% 26.7%
2018 -1.39% -9.15%
2017 11.58% 24.35%
2016 8.85% 8.22%
2015 -11.65% -2.39%
2014 -0.44% 4.64%
2013 -27.96% 22.91%
2012 8.37% 15.99%
2011 8.66% -7.6%
2010 27.93% 12.31%

IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% respectively.

The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

IAU vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IAU $10,000 $16,786 6.03%
ACWI $10,000 $27,241 10.21%

A $10,000 investment in IAU would have resulted in a final balance of $16,786. This is a profit of $6,786 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.03%.

With a $10,000 investment in ACWI, the end total would have been $27,241. This equates to a $17,241 profit over 11 years and a compound annual growth rate (CAGR) of 10.21%.

IAU’s CAGR is 4.18 percentage points lower than that of ACWI and as a result, would have yielded $10,455 less on a $10,000 investment. Thus, IAU performed worse than ACWI by 4.18% annually.


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