The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Russell Mid-Cap ETF (IWR) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IWR is a iShares Mid-Cap Blend fund. So, what’s the difference between IEMG and IWR? And which fund is better?
The expense ratio of IEMG is 0.08 percentage points lower than IWR’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 IWR over the past ten years.
In this article, we’ll compare IEMG vs. IWR. We’ll look at portfolio growth and holdings, as well as at their performance and fund composition. Moreover, I’ll also discuss IEMG’s and IWR’s annual returns, industry exposure, and risk metrics and examine how these affect their overall returns.
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Summary
| IEMG | IWR | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares Russell Mid-Cap ETF |
| Category | Diversified Emerging Mkts | Mid-Cap Blend |
| Issuer | iShares | iShares |
| AUM | 83.68B | 29.84B |
| Avg. Return | 7.41% | 14.15% |
| Div. Yield | 1.78% | 0.99% |
| Expense Ratio | 0.11% | 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 Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.
IEMG’s dividend yield is 0.79% higher than that of IWR (1.78% vs. 0.99%). Also, IEMG yielded on average 6.74% less per year over the past decade (7.41% vs. 14.15%). The expense ratio of IEMG is 0.08 percentage points lower than IWR’s (0.11% vs. 0.19%).
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Fund Composition
Industry Exposure
| IEMG | IWR | |
| Technology | 20.44% | 19.67% |
| Industrials | 5.92% | 14.54% |
| Energy | 4.71% | 3.48% |
| Communication Services | 11.41% | 4.64% |
| Utilities | 2.13% | 4.46% |
| Healthcare | 5.73% | 11.76% |
| Consumer Defensive | 5.68% | 3.82% |
| Real Estate | 2.75% | 8.31% |
| Financial Services | 16.9% | 11.64% |
| Consumer Cyclical | 15.67% | 13.59% |
| Basic Materials | 8.64% | 4.1% |
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 ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.
IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.
IEMG is 0.77% more exposed to the Technology sector than IWR (20.44% vs 19.67%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 5.26% higher and 2.08% higher respectively (16.9% vs. 11.64% and 15.67% vs. 13.59%). In total, Real Estate, Energy, and Consumer Defensive also make up 2.47% less of the fund’s holdings compared to IWR (13.14% vs. 15.61%).
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%.
| IWR Holdings | Weight |
| IDEXX Laboratories Inc | 0.51% |
| DocuSign Inc | 0.51% |
| Twitter Inc | 0.48% |
| Chipotle Mexican Grill Inc | 0.47% |
| Roku Inc Class A | 0.44% |
| Marvell Technology Inc | 0.44% |
| DexCom Inc | 0.44% |
| Trane Technologies PLC | 0.43% |
| MSCI Inc | 0.43% |
| Carrier Global Corp Ordinary Shares | 0.43% |
IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.
Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.
Risk Analysis
| IEMG | IWR | |
| Mean Return | 0 | 1.17 |
| R-squared | 0 | 91.52 |
| Std. Deviation | 0 | 15.66 |
| Alpha | 0 | -2.8 |
| Beta | 0 | 1.11 |
| Sharpe Ratio | 0 | 0.86 |
| Treynor Ratio | 0 | 11.72 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Alpha of 0 with a Mean Return of 0 and a Beta of 0. Its Treynor Ratio is 0 while IEMG’s Standard Deviation is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.
The iShares Russell Mid-Cap ETF (IWR) has a Mean Return of 1.17 with a R-squared of 91.52 and a Alpha of -2.8. Its Beta is 1.11 while IWR’s Sharpe Ratio is 0.86. Furthermore, the fund has a Treynor Ratio of 11.72 and a Standard Deviation of 15.66.
IEMG’s Mean Return is 1.17 points lower than that of IWR and its R-squared is 91.52 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IWR. The Alpha and Beta of IEMG are 2.80 points higher and 1.11 points lower than IWR’s Alpha and Beta.
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Performance
Annual Returns
| Year | IEMG | IWR |
| 2020 | 18.18% | 16.91% |
| 2019 | 17.5% | 30.31% |
| 2018 | -14.69% | -9.13% |
| 2017 | 36.78% | 18.32% |
| 2016 | 9.98% | 13.58% |
| 2015 | -13.86% | -2.57% |
| 2014 | -2.04% | 13.03% |
| 2013 | -2.16% | 34.5% |
| 2012 | 0.0% | 17.13% |
| 2011 | 0.0% | -1.67% |
| 2010 | 0.0% | 25.25% |
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 IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| IWR | $10,000 | $20,487 | 14.15% |
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 IWR, the end total would have been $20,487. This equates to a $10,487 profit over 7 years and a compound annual growth rate (CAGR) of 14.15%.
IEMG’s CAGR is 6.74 percentage points lower than that of IWR and as a result, would have yielded $5,450 less on a $10,000 investment. Thus, IEMG performed worse than IWR by 6.74% annually.
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