The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Russell 1000 Value ETF (IWD) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IWD is a iShares Large Value fund. So, what’s the difference between IEMG and IWD? And which fund is better?
The expense ratio of IEMG is 0.08 percentage points lower than IWD’s (0.11% vs. 0.19%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IWD over the past ten years.
In this article, we’ll compare IEMG vs. IWD. We’ll look at portfolio growth and holdings, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss IEMG’s and IWD’s risk metrics, performance, and fund composition and examine how these affect their overall returns.
|Name||iShares Core MSCI Emerging Markets ETF||iShares Russell 1000 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 Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
IEMG’s dividend yield is 0.21% higher than that of IWD (1.78% vs. 1.57%). Also, IEMG yielded on average 3.99% less per year over the past decade (7.41% vs. 11.40%). The expense ratio of IEMG is 0.08 percentage points lower than IWD’s (0.11% vs. 0.19%).
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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 Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
IEMG is 10.16% more exposed to the Technology sector than IWD (20.44% vs 10.28%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 3.53% lower and 10.05% higher respectively (16.9% vs. 20.43% and 15.67% vs. 5.62%). In total, Real Estate, Energy, and Consumer Defensive also make up 4.32% less of the fund’s holdings compared to IWD (13.14% vs. 17.46%).
|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||2.58%|
|JPMorgan Chase & Co||2.25%|
|Johnson & Johnson||2.24%|
|UnitedHealth Group Inc||1.78%|
|Procter & Gamble Co||1.71%|
|The Walt Disney Co||1.5%|
|Bank of America Corp||1.43%|
|Comcast Corp Class A||1.33%|
|Exxon Mobil Corp||1.2%|
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
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The iShares Core MSCI Emerging Markets ETF (IEMG) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its R-squared is 0 while IEMG’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Beta of 0.
The iShares Russell 1000 Value ETF (IWD) has a Sharpe Ratio of 0.81 with a R-squared of 92.38 and a Alpha of -3.23. Its Treynor Ratio is 11.06 while IWD’s Mean Return is 1.03. Furthermore, the fund has a Standard Deviation of 14.35 and a Beta of 1.02.
IEMG’s Mean Return is 1.03 points lower than that of IWD and its R-squared is 92.38 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IWD. The Alpha and Beta of IEMG are 3.23 points higher and 1.02 points lower than IWD’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 2013 was the strongest year for IWD, returning 32.18% on an annual basis. The poorest year for IWD in the last ten years was 2018, with a yield of -8.4%. Most years the iShares Russell 1000 Value ETF has given investors modest returns, such as in 2014, 2017, and 2010, when gains were 13.21%, 13.47%, and 15.3% 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 IWD, the end total would have been $17,165. This equates to a $7,165 profit over 7 years and a compound annual growth rate (CAGR) of 11.40%.
IEMG’s CAGR is 3.99 percentage points lower than that of IWD and as a result, would have yielded $2,128 less on a $10,000 investment. Thus, IEMG performed worse than IWD by 3.99% annually.
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