IVE vs. EFV: What’s The Difference?

The iShares S&P 500 Value ETF (IVE) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between IVE and EFV? And which fund is better?

The expense ratio of IVE is 0.21 percentage points lower than EFV’s (0.18% vs. 0.39%). IVE also has a lower exposure to the financial services sector and a lower standard deviation. Overall, IVE has provided higher returns than EFV over the past 11 years.

In this article, we’ll compare IVE vs. EFV. We’ll look at annual returns and portfolio growth, as well as at their risk metrics and performance. Moreover, I’ll also discuss IVE’s and EFV’s industry exposure, holdings, and fund composition and examine how these affect their overall returns.

Summary

IVE EFV
Name iShares S&P 500 Value ETF iShares MSCI EAFE Value ETF
Category Large Value Foreign Large Value
Issuer iShares iShares
AUM 22.4B 14.37B
Avg. Return 11.68% 3.99%
Div. Yield 1.88% 2.94%
Expense Ratio 0.18% 0.39%

The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

IVE’s dividend yield is 1.06% lower than that of EFV (1.88% vs. 2.94%). Also, IVE yielded on average 7.69% more per year over the past decade (11.68% vs. 3.99%). The expense ratio of IVE is 0.21 percentage points lower than EFV’s (0.18% vs. 0.39%).

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Fund Composition

Industry Exposure

IVE vs. EFV - Industry Exposure

IVE EFV
Technology 9.41% 2.98%
Industrials 12.19% 11.6%
Energy 5.43% 6.6%
Communication Services 6.4% 6.46%
Utilities 4.82% 6.14%
Healthcare 15.4% 9.19%
Consumer Defensive 9.23% 6.82%
Real Estate 4.38% 5.06%
Financial Services 22.06% 26.55%
Consumer Cyclical 7.68% 9.0%
Basic Materials 2.99% 9.59%

The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

IVE is 4.49% less exposed to the Financial Services sector than EFV (22.06% vs 26.55%). IVE’s exposure to Healthcare and Industrials stocks is 6.21% higher and 0.59% higher respectively (15.4% vs. 9.19% and 12.19% vs. 11.6%). In total, Real Estate, Utilities, and Energy also make up 3.17% less of the fund’s holdings compared to EFV (14.63% vs. 17.80%).

Holdings

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

IVE EFV
Mean Return 1.05 0.42
R-squared 92.08 92.15
Std. Deviation 14.3 16.53
Alpha -2.9 -1.77
Beta 1.01 1.05
Sharpe Ratio 0.83 0.26
Treynor Ratio 11.41 2.92

The iShares S&P 500 Value ETF (IVE) has a R-squared of 92.08 with a Beta of 1.01 and a Treynor Ratio of 11.41. Its Sharpe Ratio is 0.83 while IVE’s Alpha is -2.9. Furthermore, the fund has a Standard Deviation of 14.3 and a Mean Return of 1.05.

The iShares MSCI EAFE Value ETF (EFV) has a Beta of 1.05 with a Standard Deviation of 16.53 and a Sharpe Ratio of 0.26. Its Treynor Ratio is 2.92 while EFV’s Alpha is -1.77. Furthermore, the fund has a Mean Return of 0.42 and a R-squared of 92.15.

IVE’s Mean Return is 0.63 points higher than that of EFV and its R-squared is 0.07 points lower. With a Standard Deviation of 14.3, IVE is slightly less volatile than EFV. The Alpha and Beta of IVE are 1.13 points lower and 0.04 points lower than EFV’s Alpha and Beta.

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Performance

Annual Returns

IVE vs. EFV - Annual Returns

Year IVE EFV
2020 1.24% -2.78%
2019 31.71% 15.97%
2018 -9.09% -14.88%
2017 15.19% 21.22%
2016 17.17% 4.87%
2015 -3.24% -5.89%
2014 12.14% -5.65%
2013 31.69% 22.61%
2012 17.45% 17.52%
2011 -0.63% -12.24%
2010 14.9% 3.18%

IVE had its best year in 2019 with an annual return of 31.71%. IVE’s worst year over the past decade yielded -9.09% and occurred in 2018. In most years the iShares S&P 500 Value ETF provided moderate returns such as in 2014, 2010, and 2017 where annual returns amounted to 12.14%, 14.9%, and 15.19% respectively.

The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

IVE vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVE $10,000 $31,350 11.68%
EFV $10,000 $14,134 3.99%

A $10,000 investment in IVE would have resulted in a final balance of $31,350. This is a profit of $21,350 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.68%.

With a $10,000 investment in EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

IVE’s CAGR is 7.69 percentage points higher than that of EFV and as a result, would have yielded $17,216 more on a $10,000 investment. Thus, IVE outperformed EFV by 7.69% annually.


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