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IEMG vs. IWF: What’s The Difference?

The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Russell 1000 Growth ETF (IWF) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IWF is a iShares Large Growth fund. So, what’s the difference between IEMG and IWF? And which fund is better?

The expense ratio of IEMG is 0.08 percentage points lower than IWF’s (0.11% vs. 0.19%). IEMG also has a lower exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IWF over the past ten years.

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

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Summary

IEMGIWF
NameiShares Core MSCI Emerging Markets ETFiShares Russell 1000 Growth ETF
CategoryDiversified Emerging MktsLarge Growth
IssueriSharesiShares
AUM83.68B72.16B
Avg. Return7.41%17.72%
Div. Yield1.78%0.52%
Expense Ratio0.11%0.19%

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 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.

IEMG’s dividend yield is 1.26% higher than that of IWF (1.78% vs. 0.52%). Also, IEMG yielded on average 10.32% less per year over the past decade (7.41% vs. 17.72%). The expense ratio of IEMG is 0.08 percentage points lower than IWF’s (0.11% vs. 0.19%).

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Fund Composition

Industry Exposure

IEMG vs. IWF - Industry Exposure

IEMGIWF
Technology20.44%39.29%
Industrials5.92%6.19%
Energy4.71%0.28%
Communication Services11.41%12.82%
Utilities2.13%0.03%
Healthcare5.73%9.23%
Consumer Defensive5.68%4.31%
Real Estate2.75%1.85%
Financial Services16.9%7.36%
Consumer Cyclical15.67%17.62%
Basic Materials8.64%1.01%

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 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.

IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.

IEMG is 18.85% less exposed to the Technology sector than IWF (20.44% vs 39.29%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 9.54% higher and 1.95% lower respectively (16.9% vs. 7.36% and 15.67% vs. 17.62%). In total, Real Estate, Energy, and Consumer Defensive also make up 6.70% more of the fund’s holdings compared to IWF (13.14% vs. 6.44%).

Holdings

IEMG - Holdings

IEMG HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd5.37%
Tencent Holdings Ltd4.42%
Alibaba Group Holding Ltd Ordinary Shares4.38%
Samsung Electronics Co Ltd3.49%
Meituan1.52%
Naspers Ltd Class N0.93%
Vale SA0.91%
Reliance Industries Ltd Shs Dematerialised0.83%
China Construction Bank Corp Class H0.77%
Infosys Ltd0.74%

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%.

IWF - Holdings

IWF HoldingsWeight
Apple Inc10.51%
Microsoft Corp9.85%
Amazon.com Inc6.63%
Facebook Inc Class A3.91%
Alphabet Inc Class A3.2%
Alphabet Inc Class C3.03%
Tesla Inc2.45%
NVIDIA Corp2.14%
Visa Inc Class A1.91%
The Home Depot Inc1.62%

IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.

Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.

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Risk Analysis

IEMGIWF
Mean Return01.48
R-squared092.93
Std. Deviation014.42
Alpha02.16
Beta01.03
Sharpe Ratio01.19
Treynor Ratio017.1

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

The iShares Russell 1000 Growth ETF (IWF) has a Treynor Ratio of 17.1 with a R-squared of 92.93 and a Sharpe Ratio of 1.19. Its Alpha is 2.16 while IWF’s Beta is 1.03. Furthermore, the fund has a Standard Deviation of 14.42 and a Mean Return of 1.48.

IEMG’s Mean Return is 1.48 points lower than that of IWF and its R-squared is 92.93 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IWF. The Alpha and Beta of IEMG are 2.16 points lower and 1.03 points lower than IWF’s Alpha and Beta.

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Performance

Annual Returns

IEMG vs. IWF - Annual Returns

YearIEMGIWF
202018.18%38.21%
201917.5%36.08%
2018-14.69%-1.68%
201736.78%29.96%
20169.98%6.92%
2015-13.86%5.48%
2014-2.04%12.84%
2013-2.16%33.19%
20120.0%15.03%
20110.0%2.47%
20100.0%16.47%

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 IWF, returning 38.21% on an annual basis. The poorest year for IWF in the last ten years was 2018, with a yield of -1.68%. Most years the iShares Russell 1000 Growth ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.84%, 15.03%, and 16.47% respectively.

Portfolio Growth

IEMG vs. IWF - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IEMG$10,000$15,0377.41%
IWF$10,000$30,58217.72%

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 IWF, the end total would have been $30,582. This equates to a $20,582 profit over 7 years and a compound annual growth rate (CAGR) of 17.72%.

IEMG’s CAGR is 10.32 percentage points lower than that of IWF and as a result, would have yielded $15,545 less on a $10,000 investment. Thus, IEMG performed worse than IWF by 10.32% annually.


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