The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between IEMG and IWP? And which fund is better?
The expense ratio of IEMG is 0.13 percentage points lower than IWP’s (0.11% vs. 0.24%). IEMG also has a lower exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IWP over the past ten years.
In this article, we’ll compare IEMG vs. IWP. We’ll look at annual returns and performance, as well as at their risk metrics and holdings. Moreover, I’ll also discuss IEMG’s and IWP’s portfolio growth, fund composition, and industry exposure and examine how these affect their overall returns.
Summary
| IEMG | IWP | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Diversified Emerging Mkts | Mid-Cap Growth |
| Issuer | iShares | iShares |
| AUM | 83.68B | 15.7B |
| Avg. Return | 7.41% | 16.75% |
| Div. Yield | 1.78% | 0.26% |
| Expense Ratio | 0.11% | 0.24% |
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 Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
IEMG’s dividend yield is 1.52% higher than that of IWP (1.78% vs. 0.26%). Also, IEMG yielded on average 9.34% less per year over the past decade (7.41% vs. 16.75%). The expense ratio of IEMG is 0.13 percentage points lower than IWP’s (0.11% vs. 0.24%).
Fund Composition
Industry Exposure
| IEMG | IWP | |
| Technology | 20.44% | 33.88% |
| Industrials | 5.92% | 14.09% |
| Energy | 4.71% | 1.51% |
| Communication Services | 11.41% | 6.32% |
| Utilities | 2.13% | 0.16% |
| Healthcare | 5.73% | 16.79% |
| Consumer Defensive | 5.68% | 2.32% |
| Real Estate | 2.75% | 2.46% |
| Financial Services | 16.9% | 4.52% |
| Consumer Cyclical | 15.67% | 16.09% |
| Basic Materials | 8.64% | 1.86% |
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 Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
IEMG is 13.44% less exposed to the Technology sector than IWP (20.44% vs 33.88%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 12.38% higher and 0.42% lower respectively (16.9% vs. 4.52% and 15.67% vs. 16.09%). In total, Real Estate, Energy, and Consumer Defensive also make up 6.85% more of the fund’s holdings compared to IWP (13.14% vs. 6.29%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| IEMG | IWP | |
| Mean Return | 0 | 1.27 |
| R-squared | 0 | 87.01 |
| Std. Deviation | 0 | 16.05 |
| Alpha | 0 | -1.03 |
| Beta | 0 | 1.1 |
| Sharpe Ratio | 0 | 0.91 |
| Treynor Ratio | 0 | 12.98 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Beta of 0 with a Alpha of 0 and a Mean Return of 0. Its Sharpe Ratio is 0 while IEMG’s Standard Deviation is 0. Furthermore, the fund has a Treynor Ratio of 0 and a R-squared of 0.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Mean Return of 1.27 with a Treynor Ratio of 12.98 and a Standard Deviation of 16.05. Its R-squared is 87.01 while IWP’s Beta is 1.1. Furthermore, the fund has a Sharpe Ratio of 0.91 and a Alpha of -1.03.
IEMG’s Mean Return is 1.27 points lower than that of IWP and its R-squared is 87.01 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IWP. The Alpha and Beta of IEMG are 1.03 points higher and 1.10 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | IEMG | IWP |
| 2020 | 18.18% | 35.29% |
| 2019 | 17.5% | 35.14% |
| 2018 | -14.69% | -4.95% |
| 2017 | 36.78% | 24.98% |
| 2016 | 9.98% | 7.15% |
| 2015 | -13.86% | -0.39% |
| 2014 | -2.04% | 11.68% |
| 2013 | -2.16% | 35.44% |
| 2012 | 0.0% | 15.62% |
| 2011 | 0.0% | -1.82% |
| 2010 | 0.0% | 26.1% |
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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| IWP | $10,000 | $25,888 | 16.75% |
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 IWP, the end total would have been $25,888. This equates to a $15,888 profit over 7 years and a compound annual growth rate (CAGR) of 16.75%.
IEMG’s CAGR is 9.34 percentage points lower than that of IWP and as a result, would have yielded $10,851 less on a $10,000 investment. Thus, IEMG performed worse than IWP by 9.34% annually.
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