IVE vs. IWS: What’s The Difference?

The iShares S&P 500 Value ETF (IVE) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between IVE and IWS? And which fund is better?

The expense ratio of IVE is 0.05 percentage points lower than IWS’s (0.18% vs. 0.23%). IVE also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IVE has provided lower returns than IWS over the past 11 years.

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

Summary

IVE IWS
Name iShares S&P 500 Value ETF iShares Russell Mid-Cap Value ETF
Category Large Value Mid-Cap Value
Issuer iShares iShares
AUM 22.4B 14.24B
Avg. Return 11.68% 12.35%
Div. Yield 1.88% 1.34%
Expense Ratio 0.18% 0.23%

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 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%.

IVE’s dividend yield is 0.54% higher than that of IWS (1.88% vs. 1.34%). Also, IVE yielded on average 0.66% less per year over the past decade (11.68% vs. 12.35%). The expense ratio of IVE is 0.05 percentage points lower than IWS’s (0.18% vs. 0.23%).

Fund Composition

Industry Exposure

IVE vs. IWS - Industry Exposure

IVE IWS
Technology 9.41% 11.39%
Industrials 12.19% 14.6%
Energy 5.43% 4.71%
Communication Services 6.4% 4.08%
Utilities 4.82% 6.97%
Healthcare 15.4% 8.56%
Consumer Defensive 9.23% 4.76%
Real Estate 4.38% 11.71%
Financial Services 22.06% 15.75%
Consumer Cyclical 7.68% 12.07%
Basic Materials 2.99% 5.4%

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 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%.

IVE is 6.31% more exposed to the Financial Services sector than IWS (22.06% vs 15.75%). IVE’s exposure to Healthcare and Industrials stocks is 6.84% higher and 2.41% lower respectively (15.4% vs. 8.56% and 12.19% vs. 14.6%). In total, Real Estate, Utilities, and Energy also make up 8.76% less of the fund’s holdings compared to IWS (14.63% vs. 23.39%).

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%.

IWS - Holdings

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

IVE IWS
Mean Return 1.05 1.06
R-squared 92.08 87.04
Std. Deviation 14.3 16.03
Alpha -2.9 -4.11
Beta 1.01 1.1
Sharpe Ratio 0.83 0.75
Treynor Ratio 11.41 10.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a R-squared of 87.04 with a Treynor Ratio of 10.3 and a Mean Return of 1.06. Its Standard Deviation is 16.03 while IWS’s Sharpe Ratio is 0.75. Furthermore, the fund has a Alpha of -4.11 and a Beta of 1.1.

IVE’s Mean Return is 0.01 points lower than that of IWS and its R-squared is 5.04 points higher. With a Standard Deviation of 14.3, IVE is slightly less volatile than IWS. The Alpha and Beta of IVE are 1.21 points higher and 0.09 points lower than IWS’s Alpha and Beta.

Performance

Annual Returns

IVE vs. IWS - Annual Returns

Year IVE IWS
2020 1.24% 4.76%
2019 31.71% 26.78%
2018 -9.09% -12.36%
2017 15.19% 13.1%
2016 17.17% 19.69%
2015 -3.24% -4.93%
2014 12.14% 14.49%
2013 31.69% 33.11%
2012 17.45% 18.27%
2011 -0.63% -1.55%
2010 14.9% 24.46%

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 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

IVE vs. IWS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVE $10,000 $31,350 11.68%
IWS $10,000 $33,083 12.35%

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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

IVE’s CAGR is 0.66 percentage points lower than that of IWS and as a result, would have yielded $1,733 less on a $10,000 investment. Thus, IVE performed worse than IWS by 0.66% annually.


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