The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IWN is a iShares Small Value fund. So, what’s the difference between IEMG and IWN? And which fund is better?
The expense ratio of IEMG is 0.13 percentage points lower than IWN’s (0.11% vs. 0.24%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IWN over the past ten years.
In this article, we’ll compare IEMG vs. IWN. We’ll look at holdings and fund composition, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss IEMG’s and IWN’s performance, portfolio growth, and risk metrics and examine how these affect their overall returns.
|Name||iShares Core MSCI Emerging Markets ETF||iShares Russell 2000 Value ETF|
|Category||Diversified Emerging Mkts||Small 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 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.
IEMG’s dividend yield is 0.52% higher than that of IWN (1.78% vs. 1.26%). Also, IEMG yielded on average 3.55% less per year over the past decade (7.41% vs. 10.96%). The expense ratio of IEMG is 0.13 percentage points lower than IWN’s (0.11% vs. 0.24%).
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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 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.
IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.
IEMG is 14.42% more exposed to the Technology sector than IWN (20.44% vs 6.02%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 6.07% lower and 7.28% higher respectively (16.9% vs. 22.97% and 15.67% vs. 8.39%). In total, Real Estate, Energy, and Consumer Defensive also make up 10.83% less of the fund’s holdings compared to IWN (13.14% vs. 23.97%).
|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%.
|AMC Entertainment Holdings Inc Class A||1.06%|
|Tenet Healthcare Corp||0.47%|
|Stag Industrial Inc||0.47%|
|EMCOR Group Inc||0.42%|
|Valley National Bancorp||0.37%|
|Chesapeake Energy Corp Ordinary Shares – New||0.37%|
|Agree Realty Corp||0.36%|
|Essent Group Ltd||0.35%|
IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.
Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.
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The iShares Core MSCI Emerging Markets ETF (IEMG) has a Sharpe Ratio of 0 with a Beta of 0 and a Mean Return of 0. Its Treynor Ratio is 0 while IEMG’s Alpha is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.
The iShares Russell 2000 Value ETF (IWN) has a Sharpe Ratio of 0.59 with a Alpha of -6.32 and a R-squared of 72.64. Its Mean Return is 1.01 while IWN’s Standard Deviation is 19.28. Furthermore, the fund has a Beta of 1.21 and a Treynor Ratio of 8.3.
IEMG’s Mean Return is 1.01 points lower than that of IWN and its R-squared is 72.64 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IWN. The Alpha and Beta of IEMG are 6.32 points higher and 1.21 points lower than IWN’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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% 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 IWN, the end total would have been $15,177. This equates to a $5,177 profit over 7 years and a compound annual growth rate (CAGR) of 10.96%.
IEMG’s CAGR is 3.55 percentage points lower than that of IWN and as a result, would have yielded $140 less on a $10,000 investment. Thus, IEMG performed worse than IWN by 3.55% annually.
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