IAU vs. IVE: What’s The Difference?

The iShares Gold Trust (IAU) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. IAU is a iShares N/A fund and IVE is a iShares Large Value fund. So, what’s the difference between IAU and IVE? And which fund is better?

The expense ratio of IAU is 0.07 percentage points higher than IVE’s (0.25% vs. 0.18%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than IVE over the past 11 years.

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

Summary

IAU IVE
Name iShares Gold Trust iShares S&P 500 Value ETF
Category N/A Large Value
Issuer iShares iShares
AUM 28.61B 22.4B
Avg. Return 6.03% 11.68%
Div. Yield 0.0% 1.88%
Expense Ratio 0.25% 0.18%

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 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%.

IAU’s dividend yield is 1.88% lower than that of IVE (0.0% vs. 1.88%). Also, IAU yielded on average 5.65% less per year over the past decade (6.03% vs. 11.68%). The expense ratio of IAU is 0.07 percentage points higher than IVE’s (0.25% vs. 0.18%).

Fund Composition

Industry Exposure

IAU vs. IVE - Industry Exposure

IAU IVE
Technology 0.0% 9.41%
Industrials 0.0% 12.19%
Energy 0.0% 5.43%
Communication Services 0.0% 6.4%
Utilities 0.0% 4.82%
Healthcare 0.0% 15.4%
Consumer Defensive 0.0% 9.23%
Real Estate 0.0% 4.38%
Financial Services 0.0% 22.06%
Consumer Cyclical 0.0% 7.68%
Basic Materials 0.0% 2.99%

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 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%.

IAU is 9.41% less exposed to the Technology sector than IVE (0.0% vs 9.41%). IAU’s exposure to Industrials and Energy stocks is 12.19% lower and 5.43% lower respectively (0.0% vs. 12.19% and 0.0% vs. 5.43%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 34.12% less of the fund’s holdings compared to IVE (0.00% vs. 34.12%).

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%.

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

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%.

Risk Analysis

IAU IVE
Mean Return 0.23 1.05
R-squared 16.03 92.08
Std. Deviation 16.97 14.3
Alpha 4.16 -2.9
Beta 0.48 1.01
Sharpe Ratio 0.13 0.83
Treynor Ratio 1.5 11.41

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

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

IAU’s Mean Return is 0.82 points lower than that of IVE and its R-squared is 76.05 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than IVE. The Alpha and Beta of IAU are 7.06 points higher and 0.53 points lower than IVE’s Alpha and Beta.

Performance

Annual Returns

IAU vs. IVE - Annual Returns

Year IAU IVE
2020 23.86% 1.24%
2019 18.54% 31.71%
2018 -1.39% -9.09%
2017 11.58% 15.19%
2016 8.85% 17.17%
2015 -11.65% -3.24%
2014 -0.44% 12.14%
2013 -27.96% 31.69%
2012 8.37% 17.45%
2011 8.66% -0.63%
2010 27.93% 14.9%

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 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

IAU vs. IVE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IAU $10,000 $16,786 6.03%
IVE $10,000 $31,350 11.68%

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 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%.

IAU’s CAGR is 5.65 percentage points lower than that of IVE and as a result, would have yielded $14,564 less on a $10,000 investment. Thus, IAU performed worse than IVE by 5.65% annually.


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