IEMG vs. DIA: Fund Composition, Risk Analysis & Performance

The iShares Core MSCI Emerging Markets ETF (IEMG) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between IEMG and DIA? And which fund is better?

The expense ratio of IEMG is 0.05 percentage points lower than DIA’s (0.11% vs. 0.16%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than DIA over the past ten years.

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

Summary

IEMG DIA
Name iShares Core MSCI Emerging Markets ETF SPDR Dow Jones Industrial Average ETF Trust
Category Diversified Emerging Mkts Large Value
Issuer iShares SPDR State Street Global Advisors
AUM 83.68B 30.46B
Avg. Return 7.41% 13.35%
Div. Yield 1.78% 1.61%
Expense Ratio 0.11% 0.16%

The iShares Core MSCI Emerging Markets ETF (IEMG) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 83.68B total assets under management and has yielded an average annual return of 7.41% over the past 10 years. The fund has a dividend yield of 1.78% with an expense ratio of 0.11%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

IEMG’s dividend yield is 0.17% higher than that of DIA (1.78% vs. 1.61%). Also, IEMG yielded on average 5.95% less per year over the past decade (7.41% vs. 13.35%). The expense ratio of IEMG is 0.05 percentage points lower than DIA’s (0.11% vs. 0.16%).

Fund Composition

Industry Exposure

IEMG vs. DIA - Industry Exposure

IEMG DIA
Technology 20.44% 17.32%
Industrials 5.92% 16.7%
Energy 4.71% 2.0%
Communication Services 11.41% 4.42%
Utilities 2.13% 0.0%
Healthcare 5.73% 17.92%
Consumer Defensive 5.68% 6.3%
Real Estate 2.75% 0.0%
Financial Services 16.9% 20.68%
Consumer Cyclical 15.67% 13.44%
Basic Materials 8.64% 1.21%

The iShares Core MSCI Emerging Markets ETF (IEMG) has the most exposure to the Technology sector at 20.44%. This is followed by Financial Services and Consumer Cyclical at 16.9% and 15.67% respectively. Real Estate (2.75%), Energy (4.71%), and Consumer Defensive (5.68%) only make up 13.14% of the fund’s total assets.

IEMG’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.73%, 5.92%, 8.64%, 11.41%, and 15.67%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

IEMG is 3.12% more exposed to the Technology sector than DIA (20.44% vs 17.32%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 3.78% lower and 2.23% higher respectively (16.9% vs. 20.68% and 15.67% vs. 13.44%). In total, Real Estate, Energy, and Consumer Defensive also make up 4.84% more of the fund’s holdings compared to DIA (13.14% vs. 8.30%).

Holdings

IEMG - Holdings

IEMG Holdings Weight
Taiwan Semiconductor Manufacturing Co Ltd 5.37%
Tencent Holdings Ltd 4.42%
Alibaba Group Holding Ltd Ordinary Shares 4.38%
Samsung Electronics Co Ltd 3.49%
Meituan 1.52%
Naspers Ltd Class N 0.93%
Vale SA 0.91%
Reliance Industries Ltd Shs Dematerialised 0.83%
China Construction Bank Corp Class H 0.77%
Infosys Ltd 0.74%

IEMG’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Samsung Electronics Co Ltd, and Meituan at 5.37%, 4.42%, 4.38%, 3.49%, and 1.52%.

Naspers Ltd Class N (0.93%), Vale SA (0.91%), and Reliance Industries Ltd Shs Dematerialised (0.83%) have a slightly smaller but still significant weight. China Construction Bank Corp Class H and Infosys Ltd are also represented in the IEMG’s holdings at 0.77% and 0.74%.

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

Risk Analysis

IEMG DIA
Mean Return 0 1.13
R-squared 0 93.31
Std. Deviation 0 13.68
Alpha 0 -0.94
Beta 0 0.97
Sharpe Ratio 0 0.94
Treynor Ratio 0 13.07

The iShares Core MSCI Emerging Markets ETF (IEMG) has a Treynor Ratio of 0 with a Alpha of 0 and a Standard Deviation of 0. Its R-squared is 0 while IEMG’s Sharpe Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Beta of 0.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a R-squared of 93.31 with a Mean Return of 1.13 and a Sharpe Ratio of 0.94. Its Alpha is -0.94 while DIA’s Beta is 0.97. Furthermore, the fund has a Standard Deviation of 13.68 and a Treynor Ratio of 13.07.

IEMG’s Mean Return is 1.13 points lower than that of DIA and its R-squared is 93.31 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than DIA. The Alpha and Beta of IEMG are 0.94 points higher and 0.97 points lower than DIA’s Alpha and Beta.

Performance

Annual Returns

IEMG vs. DIA - Annual Returns

Year IEMG DIA
2020 18.18% 9.63%
2019 17.5% 25.09%
2018 -14.69% -3.6%
2017 36.78% 27.97%
2016 9.98% 16.28%
2015 -13.86% 0.1%
2014 -2.04% 9.88%
2013 -2.16% 29.41%
2012 0.0% 10.04%
2011 0.0% 8.21%
2010 0.0% 13.87%

IEMG had its best year in 2017 with an annual return of 36.78%. IEMG’s worst year over the past decade yielded -14.69% and occurred in 2018. In most years the iShares Core MSCI Emerging Markets ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.

The year 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.

Portfolio Growth

IEMG vs. DIA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IEMG $10,000 $15,037 7.41%
DIA $10,000 $21,636 13.35%

A $10,000 investment in IEMG would have resulted in a final balance of $15,037. This is a profit of $5,037 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.41%.

With a $10,000 investment in DIA, the end total would have been $21,636. This equates to a $11,636 profit over 7 years and a compound annual growth rate (CAGR) of 13.35%.

IEMG’s CAGR is 5.95 percentage points lower than that of DIA and as a result, would have yielded $6,599 less on a $10,000 investment. Thus, IEMG performed worse than DIA by 5.95% annually.


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