The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IVE is a iShares Large Value fund. So, what’s the difference between IEMG and IVE? And which fund is better?
The expense ratio of IEMG is 0.07 percentage points lower than IVE’s (0.11% vs. 0.18%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IVE over the past ten years.
In this article, we’ll compare IEMG vs. IVE. We’ll look at performance and fund composition, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss IEMG’s and IVE’s annual returns, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||iShares Core MSCI Emerging Markets ETF||iShares S&P 500 Value ETF|
|Category||Diversified Emerging Mkts||Large Value|
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 iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
IEMG’s dividend yield is 0.10% lower than that of IVE (1.78% vs. 1.88%). Also, IEMG yielded on average 4.28% less per year over the past decade (7.41% vs. 11.68%). The expense ratio of IEMG is 0.07 percentage points lower than IVE’s (0.11% vs. 0.18%).
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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 iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
IEMG is 11.03% more exposed to the Technology sector than IVE (20.44% vs 9.41%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 5.16% lower and 7.99% higher respectively (16.9% vs. 22.06% and 15.67% vs. 7.68%). In total, Real Estate, Energy, and Consumer Defensive also make up 5.90% less of the fund’s holdings compared to IVE (13.14% vs. 19.04%).
|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%|
|Naspers Ltd Class N||0.93%|
|Reliance Industries Ltd Shs Dematerialised||0.83%|
|China Construction Bank Corp Class H||0.77%|
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%.
|Berkshire Hathaway Inc Class B||3.05%|
|JPMorgan Chase & Co||2.65%|
|The Walt Disney Co||1.85%|
|Bank of America Corp||1.67%|
|Johnson & Johnson||1.57%|
|Exxon Mobil Corp||1.41%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
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The iShares Core MSCI Emerging Markets ETF (IEMG) has a Treynor Ratio of 0 with a Alpha of 0 and a Sharpe Ratio of 0. Its R-squared is 0 while IEMG’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a Mean Return of 0.
The iShares S&P 500 Value ETF (IVE) has a Sharpe Ratio of 0.83 with a Alpha of -2.9 and a Treynor Ratio of 11.41. Its Beta is 1.01 while IVE’s Mean Return is 1.05. Furthermore, the fund has a Standard Deviation of 14.3 and a R-squared of 92.08.
IEMG’s Mean Return is 1.05 points lower than that of IVE and its R-squared is 92.08 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IVE. The Alpha and Beta of IEMG are 2.90 points higher and 1.01 points lower than IVE’s Alpha and Beta.
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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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IVE, the end total would have been $17,752. This equates to a $7,752 profit over 7 years and a compound annual growth rate (CAGR) of 11.68%.
IEMG’s CAGR is 4.28 percentage points lower than that of IVE and as a result, would have yielded $2,715 less on a $10,000 investment. Thus, IEMG performed worse than IVE by 4.28% annually.
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