IAU vs. IWN: What’s The Difference?

The iShares Gold Trust (IAU) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. IAU is a iShares N/A fund and IWN is a iShares Small Value fund. So, what’s the difference between IAU and IWN? And which fund is better?

The expense ratio of IAU is 0.01 percentage points higher than IWN’s (0.25% vs. 0.24%). IAU also has a lower exposure to the technology sector and a lower standard deviation. Overall, IAU has provided lower returns than IWN over the past 11 years.

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

Summary

IAU IWN
Name iShares Gold Trust iShares Russell 2000 Value ETF
Category N/A Small Value
Issuer iShares iShares
AUM 28.61B 15.48B
Avg. Return 6.03% 10.96%
Div. Yield 0.0% 1.26%
Expense Ratio 0.25% 0.24%

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 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%.

IAU’s dividend yield is 1.26% lower than that of IWN (0.0% vs. 1.26%). Also, IAU yielded on average 4.93% less per year over the past decade (6.03% vs. 10.96%). The expense ratio of IAU is 0.01 percentage points higher than IWN’s (0.25% vs. 0.24%).

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

IAU vs. IWN - Industry Exposure

IAU IWN
Technology 0.0% 6.02%
Industrials 0.0% 14.58%
Energy 0.0% 5.84%
Communication Services 0.0% 4.17%
Utilities 0.0% 4.69%
Healthcare 0.0% 10.94%
Consumer Defensive 0.0% 3.77%
Real Estate 0.0% 14.36%
Financial Services 0.0% 22.97%
Consumer Cyclical 0.0% 8.39%
Basic Materials 0.0% 4.29%

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 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%.

IAU is 6.02% less exposed to the Technology sector than IWN (0.0% vs 6.02%). IAU’s exposure to Industrials and Energy stocks is 14.58% lower and 5.84% lower respectively (0.0% vs. 14.58% and 0.0% vs. 5.84%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 45.72% less of the fund’s holdings compared to IWN (0.00% vs. 45.72%).

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%.

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%.

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

IAU IWN
Mean Return 0.23 1.01
R-squared 16.03 72.64
Std. Deviation 16.97 19.28
Alpha 4.16 -6.32
Beta 0.48 1.21
Sharpe Ratio 0.13 0.59
Treynor Ratio 1.5 8.3

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

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

IAU’s Mean Return is 0.78 points lower than that of IWN and its R-squared is 56.61 points lower. With a Standard Deviation of 16.97, IAU is slightly less volatile than IWN. The Alpha and Beta of IAU are 10.48 points higher and 0.73 points lower than IWN’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

IAU vs. IWN - Annual Returns

Year IAU IWN
2020 23.86% 4.5%
2019 18.54% 22.17%
2018 -1.39% -12.94%
2017 11.58% 7.73%
2016 8.85% 31.64%
2015 -11.65% -7.53%
2014 -0.44% 4.13%
2013 -27.96% 34.3%
2012 8.37% 17.92%
2011 8.66% -5.64%
2010 27.93% 24.29%

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 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

IAU vs. IWN - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IAU $10,000 $16,786 6.03%
IWN $10,000 $28,189 10.96%

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 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%.

IAU’s CAGR is 4.93 percentage points lower than that of IWN and as a result, would have yielded $11,403 less on a $10,000 investment. Thus, IAU performed worse than IWN by 4.93% 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