The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and VLUE is a iShares Large Value fund. So, what’s the difference between IEMG and VLUE? And which fund is better?
The expense ratio of IEMG is 0.04 percentage points lower than VLUE’s (0.11% vs. 0.15%). IEMG also has a lower exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than VLUE over the past ten years.
In this article, we’ll compare IEMG vs. VLUE. We’ll look at risk metrics and annual returns, as well as at their industry exposure and performance. Moreover, I’ll also discuss IEMG’s and VLUE’s fund composition, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| IEMG | VLUE | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares MSCI USA Value Factor ETF |
| Category | Diversified Emerging Mkts | Large Value |
| Issuer | iShares | iShares |
| AUM | 83.68B | 15.95B |
| Avg. Return | 7.41% | 8.91% |
| Div. Yield | 1.78% | 1.89% |
| Expense Ratio | 0.11% | 0.15% |
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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
IEMG’s dividend yield is 0.11% lower than that of VLUE (1.78% vs. 1.89%). Also, IEMG yielded on average 1.50% less per year over the past decade (7.41% vs. 8.91%). The expense ratio of IEMG is 0.04 percentage points lower than VLUE’s (0.11% vs. 0.15%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
Fund Composition
Industry Exposure
| IEMG | VLUE | |
| Technology | 20.44% | 26.89% |
| Industrials | 5.92% | 9.14% |
| Energy | 4.71% | 2.42% |
| Communication Services | 11.41% | 10.39% |
| Utilities | 2.13% | 2.68% |
| Healthcare | 5.73% | 14.31% |
| Consumer Defensive | 5.68% | 7.22% |
| Real Estate | 2.75% | 3.19% |
| Financial Services | 16.9% | 10.96% |
| Consumer Cyclical | 15.67% | 10.66% |
| Basic Materials | 8.64% | 2.14% |
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 MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
IEMG is 6.45% less exposed to the Technology sector than VLUE (20.44% vs 26.89%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 5.94% higher and 5.01% higher respectively (16.9% vs. 10.96% and 15.67% vs. 10.66%). In total, Real Estate, Energy, and Consumer Defensive also make up 0.31% more of the fund’s holdings compared to VLUE (13.14% vs. 12.83%).
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%.
| VLUE Holdings | Weight |
| AT&T Inc | 7.13% |
| Intel Corp | 6.14% |
| General Motors Co | 3.19% |
| Micron Technology Inc | 3.14% |
| Cisco Systems Inc | 3.05% |
| International Business Machines Corp | 2.76% |
| Target Corp | 2.38% |
| Citigroup Inc | 2.32% |
| Ford Motor Co | 2.23% |
| Pfizer Inc | 2.17% |
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
Risk Analysis
| IEMG | VLUE | |
| Mean Return | 0 | 0 |
| R-squared | 0 | 0 |
| Std. Deviation | 0 | 0 |
| Alpha | 0 | 0 |
| Beta | 0 | 0 |
| Sharpe Ratio | 0 | 0 |
| Treynor Ratio | 0 | 0 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Standard Deviation of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Beta is 0 while IEMG’s R-squared is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.
The iShares MSCI USA Value Factor ETF (VLUE) has a Alpha of 0 with a R-squared of 0 and a Standard Deviation of 0. Its Mean Return is 0 while VLUE’s Sharpe Ratio is 0. Furthermore, the fund has a Beta of 0 and a Treynor Ratio of 0.
IEMG’s Mean Return is 0.00 points lower than that of VLUE and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than VLUE. The Alpha and Beta of IEMG are 0.00 points lower and 0.00 points lower than VLUE’s Alpha and Beta.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
Performance
Annual Returns
| Year | IEMG | VLUE |
| 2020 | 18.18% | -0.32% |
| 2019 | 17.5% | 27.47% |
| 2018 | -14.69% | -11.18% |
| 2017 | 36.78% | 21.97% |
| 2016 | 9.98% | 15.68% |
| 2015 | -13.86% | -3.54% |
| 2014 | -2.04% | 12.29% |
| 2013 | -2.16% | 0.0% |
| 2012 | 0.0% | 0.0% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 0.0% |
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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| VLUE | $10,000 | $17,247 | 8.91% |
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 VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
IEMG’s CAGR is 1.50 percentage points lower than that of VLUE and as a result, would have yielded $2,210 less on a $10,000 investment. Thus, IEMG performed worse than VLUE by 1.50% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I started this blog because I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
To track my progress towards complete financial independence I use Personal Capital. Most of my monthly surplus I invest in Vanguard ETFs with M1 Finance. I use the dividends (plus their 'borrow' option) to invest in real estate deals with Fundrise.
Finally, I invest the real estate distributions into startups using Mainvest and high-yield real estate debt with Groundfloor.
