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IAU vs. IWS: What’s The Difference?

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

The expense ratio of IAU is 0.02 percentage points higher than IWS’s (0.25% vs. 0.23%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than IWS over the past 11 years.

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

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Summary

IAUIWS
NameiShares Gold TrustiShares Russell Mid-Cap Value ETF
CategoryN/AMid-Cap Value
IssueriSharesiShares
AUM28.61B14.24B
Avg. Return6.03%12.35%
Div. Yield0.0%1.34%
Expense Ratio0.25%0.23%

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 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%.

IAU’s dividend yield is 1.34% lower than that of IWS (0.0% vs. 1.34%). Also, IAU yielded on average 6.32% less per year over the past decade (6.03% vs. 12.35%). The expense ratio of IAU is 0.02 percentage points higher than IWS’s (0.25% vs. 0.23%).

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Fund Composition

Industry Exposure

IAU vs. IWS - Industry Exposure

IAUIWS
Technology0.0%11.39%
Industrials0.0%14.6%
Energy0.0%4.71%
Communication Services0.0%4.08%
Utilities0.0%6.97%
Healthcare0.0%8.56%
Consumer Defensive0.0%4.76%
Real Estate0.0%11.71%
Financial Services0.0%15.75%
Consumer Cyclical0.0%12.07%
Basic Materials0.0%5.4%

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 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%.

IAU is 11.39% less exposed to the Technology sector than IWS (0.0% vs 11.39%). IAU’s exposure to Industrials and Energy stocks is 14.60% lower and 4.71% lower respectively (0.0% vs. 14.6% and 0.0% vs. 4.71%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 39.53% less of the fund’s holdings compared to IWS (0.00% vs. 39.53%).

Holdings

IAU - Holdings

IAU HoldingsWeight
Gold100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

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%.

IWS - Holdings

IWS HoldingsWeight
Twitter Inc0.69%
Marvell Technology Inc0.69%
IHS Markit Ltd0.62%
Prudential Financial Inc0.56%
Otis Worldwide Corp Ordinary Shares0.54%
International Flavors & Fragrances Inc0.53%
Xcel Energy Inc0.52%
Motorola Solutions Inc0.52%
Aptiv PLC0.52%
Aflac Inc0.52%

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%.

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Risk Analysis

IAUIWS
Mean Return0.231.06
R-squared16.0387.04
Std. Deviation16.9716.03
Alpha4.16-4.11
Beta0.481.1
Sharpe Ratio0.130.75
Treynor Ratio1.510.3

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

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

IAU’s Mean Return is 0.83 points lower than that of IWS and its R-squared is 71.01 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than IWS. The Alpha and Beta of IAU are 8.27 points higher and 0.62 points lower than IWS’s Alpha and Beta.

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Performance

Annual Returns

IAU vs. IWS - Annual Returns

YearIAUIWS
202023.86%4.76%
201918.54%26.78%
2018-1.39%-12.36%
201711.58%13.1%
20168.85%19.69%
2015-11.65%-4.93%
2014-0.44%14.49%
2013-27.96%33.11%
20128.37%18.27%
20118.66%-1.55%
201027.93%24.46%

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 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

IAU vs. IWS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IAU$10,000$16,7866.03%
IWS$10,000$33,08312.35%

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 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%.

IAU’s CAGR is 6.32 percentage points lower than that of IWS and as a result, would have yielded $16,297 less on a $10,000 investment. Thus, IAU performed worse than IWS by 6.32% annually.


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