The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between IEMG and IWS? And which fund is better?
The expense ratio of IEMG is 0.12 percentage points lower than IWS’s (0.11% vs. 0.23%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IWS over the past ten years.
In this article, we’ll compare IEMG vs. IWS. We’ll look at portfolio growth and fund composition, as well as at their risk metrics and performance. Moreover, I’ll also discuss IEMG’s and IWS’s industry exposure, annual returns, and holdings and examine how these affect their overall returns.
Summary
| IEMG | IWS | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares Russell Mid-Cap Value ETF |
| Category | Diversified Emerging Mkts | Mid-Cap Value |
| Issuer | iShares | iShares |
| AUM | 83.68B | 14.24B |
| Avg. Return | 7.41% | 12.35% |
| Div. Yield | 1.78% | 1.34% |
| Expense Ratio | 0.11% | 0.23% |
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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
IEMG’s dividend yield is 0.44% higher than that of IWS (1.78% vs. 1.34%). Also, IEMG yielded on average 4.94% less per year over the past decade (7.41% vs. 12.35%). The expense ratio of IEMG is 0.12 percentage points lower than IWS’s (0.11% vs. 0.23%).
Fund Composition
Industry Exposure
| IEMG | IWS | |
| Technology | 20.44% | 11.39% |
| Industrials | 5.92% | 14.6% |
| Energy | 4.71% | 4.71% |
| Communication Services | 11.41% | 4.08% |
| Utilities | 2.13% | 6.97% |
| Healthcare | 5.73% | 8.56% |
| Consumer Defensive | 5.68% | 4.76% |
| Real Estate | 2.75% | 11.71% |
| Financial Services | 16.9% | 15.75% |
| Consumer Cyclical | 15.67% | 12.07% |
| Basic Materials | 8.64% | 5.4% |
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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.
IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.
IEMG is 9.05% more exposed to the Technology sector than IWS (20.44% vs 11.39%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 1.15% higher and 3.60% higher respectively (16.9% vs. 15.75% and 15.67% vs. 12.07%). In total, Real Estate, Energy, and Consumer Defensive also make up 8.04% less of the fund’s holdings compared to IWS (13.14% vs. 21.18%).
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%.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
Risk Analysis
| IEMG | IWS | |
| Mean Return | 0 | 1.06 |
| R-squared | 0 | 87.04 |
| Std. Deviation | 0 | 16.03 |
| Alpha | 0 | -4.11 |
| Beta | 0 | 1.1 |
| Sharpe Ratio | 0 | 0.75 |
| Treynor Ratio | 0 | 10.3 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Standard Deviation of 0 with a R-squared of 0 and a Beta of 0. Its Alpha is 0 while IEMG’s Sharpe Ratio is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Mean Return of 0.
The iShares Russell Mid-Cap Value ETF (IWS) has a Standard Deviation of 16.03 with a Alpha of -4.11 and a Beta of 1.1. Its Sharpe Ratio is 0.75 while IWS’s Mean Return is 1.06. Furthermore, the fund has a R-squared of 87.04 and a Treynor Ratio of 10.3.
IEMG’s Mean Return is 1.06 points lower than that of IWS and its R-squared is 87.04 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IWS. The Alpha and Beta of IEMG are 4.11 points higher and 1.10 points lower than IWS’s Alpha and Beta.
Performance
Annual Returns
| Year | IEMG | IWS |
| 2020 | 18.18% | 4.76% |
| 2019 | 17.5% | 26.78% |
| 2018 | -14.69% | -12.36% |
| 2017 | 36.78% | 13.1% |
| 2016 | 9.98% | 19.69% |
| 2015 | -13.86% | -4.93% |
| 2014 | -2.04% | 14.49% |
| 2013 | -2.16% | 33.11% |
| 2012 | 0.0% | 18.27% |
| 2011 | 0.0% | -1.55% |
| 2010 | 0.0% | 24.46% |
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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| IWS | $10,000 | $17,150 | 12.35% |
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 IWS, the end total would have been $17,150. This equates to a $7,150 profit over 7 years and a compound annual growth rate (CAGR) of 12.35%.
IEMG’s CAGR is 4.94 percentage points lower than that of IWS and as a result, would have yielded $2,113 less on a $10,000 investment. Thus, IEMG performed worse than IWS by 4.94% annually.
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