The iShares Core MSCI EAFE ETF (IEFA) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. IEFA is a iShares Foreign Large Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between IEFA and IWP? And which fund is better?
The expense ratio of IEFA is 0.17 percentage points lower than IWP’s (0.07% vs. 0.24%). IEFA also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IEFA has provided lower returns than IWP over the past ten years.
In this article, we’ll compare IEFA vs. IWP. We’ll look at performance and annual returns, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss IEFA’s and IWP’s risk metrics, holdings, and fund composition and examine how these affect their overall returns.
Summary
| IEFA | IWP | |
| Name | iShares Core MSCI EAFE ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Foreign Large Blend | Mid-Cap Growth |
| Issuer | iShares | iShares |
| AUM | 95.78B | 15.7B |
| Avg. Return | 5.79% | 16.75% |
| Div. Yield | 2.28% | 0.26% |
| Expense Ratio | 0.07% | 0.24% |
The iShares Core MSCI EAFE ETF (IEFA) is a Foreign Large Blend fund that is issued by iShares. It currently has 95.78B total assets under management and has yielded an average annual return of 5.79% over the past 10 years. The fund has a dividend yield of 2.28% with an expense ratio of 0.07%.
The iShares Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
IEFA’s dividend yield is 2.02% higher than that of IWP (2.28% vs. 0.26%). Also, IEFA yielded on average 10.96% less per year over the past decade (5.79% vs. 16.75%). The expense ratio of IEFA is 0.17 percentage points lower than IWP’s (0.07% vs. 0.24%).
Fund Composition
Industry Exposure
| IEFA | IWP | |
| Technology | 9.81% | 33.88% |
| Industrials | 16.32% | 14.09% |
| Energy | 3.19% | 1.51% |
| Communication Services | 5.53% | 6.32% |
| Utilities | 3.25% | 0.16% |
| Healthcare | 12.01% | 16.79% |
| Consumer Defensive | 9.78% | 2.32% |
| Real Estate | 4.31% | 2.46% |
| Financial Services | 15.91% | 4.52% |
| Consumer Cyclical | 11.96% | 16.09% |
| Basic Materials | 7.93% | 1.86% |
The iShares Core MSCI EAFE ETF (IEFA) has the most exposure to the Industrials sector at 16.32%. This is followed by Financial Services and Healthcare at 15.91% and 12.01% respectively. Utilities (3.25%), Real Estate (4.31%), and Communication Services (5.53%) only make up 13.09% of the fund’s total assets.
IEFA’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Technology, Consumer Cyclical, and Healthcare stocks at 7.93%, 9.78%, 9.81%, 11.96%, and 12.01%.
The iShares Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
IEFA is 2.23% more exposed to the Industrials sector than IWP (16.32% vs 14.09%). IEFA’s exposure to Financial Services and Healthcare stocks is 11.39% higher and 4.78% lower respectively (15.91% vs. 4.52% and 12.01% vs. 16.79%). In total, Utilities, Real Estate, and Communication Services also make up 4.15% more of the fund’s holdings compared to IWP (13.09% vs. 8.94%).
Holdings
| IEFA Holdings | Weight |
| Nestle SA | 1.77% |
| ASML Holding NV | 1.43% |
| Roche Holding AG | 1.31% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.08% |
| Novartis AG | 1.0% |
| Toyota Motor Corp | 0.92% |
| AstraZeneca PLC | 0.78% |
| Unilever PLC | 0.76% |
| AIA Group Ltd | 0.74% |
| SAP SE | 0.73% |
IEFA’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 1.77%, 1.43%, 1.31%, 1.08%, and 1.0%.
Toyota Motor Corp (0.92%), AstraZeneca PLC (0.78%), and Unilever PLC (0.76%) have a slightly smaller but still significant weight. AIA Group Ltd and SAP SE are also represented in the IEFA’s holdings at 0.74% and 0.73%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Performance
Annual Returns
| Year | IEFA | IWP |
| 2020 | 8.55% | 35.29% |
| 2019 | 22.67% | 35.14% |
| 2018 | -14.2% | -4.95% |
| 2017 | 26.42% | 24.98% |
| 2016 | 1.36% | 7.15% |
| 2015 | 0.53% | -0.39% |
| 2014 | -4.82% | 11.68% |
| 2013 | 23.73% | 35.44% |
| 2012 | 0.0% | 15.62% |
| 2011 | 0.0% | -1.82% |
| 2010 | 0.0% | 26.1% |
IEFA had its best year in 2017 with an annual return of 26.42%. IEFA’s worst year over the past decade yielded -14.2% and occurred in 2018. In most years the iShares Core MSCI EAFE ETF provided moderate returns such as in 2010, 2015, and 2016 where annual returns amounted to 0.0%, 0.53%, and 1.36% respectively.
The year 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEFA | $10,000 | $14,008 | 5.79% |
| IWP | $10,000 | $25,888 | 16.75% |
A $10,000 investment in IEFA would have resulted in a final balance of $14,008. This is a profit of $4,008 over 7 years and amounts to a compound annual growth rate (CAGR) of 5.79%.
With a $10,000 investment in IWP, the end total would have been $25,888. This equates to a $15,888 profit over 7 years and a compound annual growth rate (CAGR) of 16.75%.
IEFA’s CAGR is 10.96 percentage points lower than that of IWP and as a result, would have yielded $11,880 less on a $10,000 investment. Thus, IEFA performed worse than IWP by 10.96% annually.
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