The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares S&P 500 Growth ETF (IVW) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IVW is a iShares Large Growth fund. So, what’s the difference between IEMG and IVW? And which fund is better?
The expense ratio of IEMG is 0.07 percentage points lower than IVW’s (0.11% vs. 0.18%). IEMG also has a lower exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IVW over the past ten years.
In this article, we’ll compare IEMG vs. IVW. We’ll look at fund composition and industry exposure, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IEMG’s and IVW’s portfolio growth, performance, and annual returns and examine how these affect their overall returns.
Summary
| IEMG | IVW | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares S&P 500 Growth ETF |
| Category | Diversified Emerging Mkts | Large Growth |
| Issuer | iShares | iShares |
| AUM | 83.68B | 35.72B |
| Avg. Return | 7.41% | 16.74% |
| Div. Yield | 1.78% | 0.61% |
| Expense Ratio | 0.11% | 0.18% |
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 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.
IEMG’s dividend yield is 1.17% higher than that of IVW (1.78% vs. 0.61%). Also, IEMG yielded on average 9.33% less per year over the past decade (7.41% vs. 16.74%). The expense ratio of IEMG is 0.07 percentage points lower than IVW’s (0.11% vs. 0.18%).
Fund Composition
Industry Exposure
| IEMG | IVW | |
| Technology | 20.44% | 37.8% |
| Industrials | 5.92% | 5.72% |
| Energy | 4.71% | 0.06% |
| Communication Services | 11.41% | 15.44% |
| Utilities | 2.13% | 0.47% |
| Healthcare | 5.73% | 11.88% |
| Consumer Defensive | 5.68% | 3.84% |
| Real Estate | 2.75% | 1.11% |
| Financial Services | 16.9% | 6.78% |
| Consumer Cyclical | 15.67% | 15.25% |
| Basic Materials | 8.64% | 1.65% |
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 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.
IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.
IEMG is 17.36% less exposed to the Technology sector than IVW (20.44% vs 37.8%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 10.12% higher and 0.42% higher respectively (16.9% vs. 6.78% and 15.67% vs. 15.25%). In total, Real Estate, Energy, and Consumer Defensive also make up 8.13% more of the fund’s holdings compared to IVW (13.14% vs. 5.01%).
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%.
| IVW Holdings | Weight |
| Apple Inc | 11.46% |
| Microsoft Corp | 10.75% |
| Amazon.com Inc | 7.14% |
| Facebook Inc Class A | 4.28% |
| Alphabet Inc Class A | 4.06% |
| Alphabet Inc Class C | 3.86% |
| Tesla Inc | 2.65% |
| NVIDIA Corp | 2.43% |
| PayPal Holdings Inc | 1.62% |
| Adobe Inc | 1.49% |
IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.
Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.
Risk Analysis
| IEMG | IVW | |
| Mean Return | 0 | 1.44 |
| R-squared | 0 | 93.82 |
| Std. Deviation | 0 | 13.77 |
| Alpha | 0 | 2.19 |
| Beta | 0 | 0.98 |
| Sharpe Ratio | 0 | 1.21 |
| Treynor Ratio | 0 | 17.24 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Mean Return of 0 with a Treynor Ratio of 0 and a Sharpe Ratio of 0. Its Standard Deviation is 0 while IEMG’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.
The iShares S&P 500 Growth ETF (IVW) has a Sharpe Ratio of 1.21 with a Beta of 0.98 and a Treynor Ratio of 17.24. Its Mean Return is 1.44 while IVW’s R-squared is 93.82. Furthermore, the fund has a Standard Deviation of 13.77 and a Alpha of 2.19.
IEMG’s Mean Return is 1.44 points lower than that of IVW and its R-squared is 93.82 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IVW. The Alpha and Beta of IEMG are 2.19 points lower and 0.98 points lower than IVW’s Alpha and Beta.
Performance
Annual Returns
| Year | IEMG | IVW |
| 2020 | 18.18% | 33.21% |
| 2019 | 17.5% | 30.91% |
| 2018 | -14.69% | -0.17% |
| 2017 | 36.78% | 27.2% |
| 2016 | 9.98% | 6.74% |
| 2015 | -13.86% | 5.33% |
| 2014 | -2.04% | 14.67% |
| 2013 | -2.16% | 32.48% |
| 2012 | 0.0% | 14.39% |
| 2011 | 0.0% | 4.49% |
| 2010 | 0.0% | 14.84% |
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 2020 was the strongest year for IVW, returning 33.21% on an annual basis. The poorest year for IVW in the last ten years was 2018, with a yield of -0.17%. Most years the iShares S&P 500 Growth ETF has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 14.39%, 14.67%, and 14.84% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| IVW | $10,000 | $28,548 | 16.74% |
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 IVW, the end total would have been $28,548. This equates to a $18,548 profit over 7 years and a compound annual growth rate (CAGR) of 16.74%.
IEMG’s CAGR is 9.33 percentage points lower than that of IVW and as a result, would have yielded $13,511 less on a $10,000 investment. Thus, IEMG performed worse than IVW by 9.33% annually.
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