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IEMG vs. VLUE: What’s The Difference?

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.

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Summary

IEMGVLUE
NameiShares Core MSCI Emerging Markets ETFiShares MSCI USA Value Factor ETF
CategoryDiversified Emerging MktsLarge Value
IssueriSharesiShares
AUM83.68B15.95B
Avg. Return7.41%8.91%
Div. Yield1.78%1.89%
Expense Ratio0.11%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%).

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Fund Composition

Industry Exposure

IEMG vs. VLUE - Industry Exposure

IEMGVLUE
Technology20.44%26.89%
Industrials5.92%9.14%
Energy4.71%2.42%
Communication Services11.41%10.39%
Utilities2.13%2.68%
Healthcare5.73%14.31%
Consumer Defensive5.68%7.22%
Real Estate2.75%3.19%
Financial Services16.9%10.96%
Consumer Cyclical15.67%10.66%
Basic Materials8.64%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

IEMG HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd5.37%
Tencent Holdings Ltd4.42%
Alibaba Group Holding Ltd Ordinary Shares4.38%
Samsung Electronics Co Ltd3.49%
Meituan1.52%
Naspers Ltd Class N0.93%
Vale SA0.91%
Reliance Industries Ltd Shs Dematerialised0.83%
China Construction Bank Corp Class H0.77%
Infosys Ltd0.74%

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

VLUE HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

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%.

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Risk Analysis

IEMGVLUE
Mean Return00
R-squared00
Std. Deviation00
Alpha00
Beta00
Sharpe Ratio00
Treynor Ratio00

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.

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Performance

Annual Returns

IEMG vs. VLUE - Annual Returns

YearIEMGVLUE
202018.18%-0.32%
201917.5%27.47%
2018-14.69%-11.18%
201736.78%21.97%
20169.98%15.68%
2015-13.86%-3.54%
2014-2.04%12.29%
2013-2.16%0.0%
20120.0%0.0%
20110.0%0.0%
20100.0%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

IEMG vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IEMG$10,000$15,0377.41%
VLUE$10,000$17,2478.91%

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.


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