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.
Summary
| IAU | IWS | |
| Name | iShares Gold Trust | iShares Russell Mid-Cap Value ETF |
| Category | N/A | Mid-Cap Value |
| Issuer | iShares | iShares |
| AUM | 28.61B | 14.24B |
| Avg. Return | 6.03% | 12.35% |
| Div. Yield | 0.0% | 1.34% |
| Expense Ratio | 0.25% | 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 | IWS | |
| Technology | 0.0% | 11.39% |
| Industrials | 0.0% | 14.6% |
| Energy | 0.0% | 4.71% |
| Communication Services | 0.0% | 4.08% |
| Utilities | 0.0% | 6.97% |
| Healthcare | 0.0% | 8.56% |
| Consumer Defensive | 0.0% | 4.76% |
| Real Estate | 0.0% | 11.71% |
| Financial Services | 0.0% | 15.75% |
| Consumer Cyclical | 0.0% | 12.07% |
| Basic Materials | 0.0% | 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 | 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%.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
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
| IAU | IWS | |
| Mean Return | 0.23 | 1.06 |
| R-squared | 16.03 | 87.04 |
| Std. Deviation | 16.97 | 16.03 |
| Alpha | 4.16 | -4.11 |
| Beta | 0.48 | 1.1 |
| Sharpe Ratio | 0.13 | 0.75 |
| Treynor Ratio | 1.5 | 10.3 |
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
| Year | IAU | IWS |
| 2020 | 23.86% | 4.76% |
| 2019 | 18.54% | 26.78% |
| 2018 | -1.39% | -12.36% |
| 2017 | 11.58% | 13.1% |
| 2016 | 8.85% | 19.69% |
| 2015 | -11.65% | -4.93% |
| 2014 | -0.44% | 14.49% |
| 2013 | -27.96% | 33.11% |
| 2012 | 8.37% | 18.27% |
| 2011 | 8.66% | -1.55% |
| 2010 | 27.93% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| IAU | $10,000 | $16,786 | 6.03% |
| IWS | $10,000 | $33,083 | 12.35% |
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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