IVW vs. ACWI: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and ACWI is a iShares N/A fund. So, what’s the difference between IVW and ACWI? And which fund is better?

The expense ratio of IVW is 0.14 percentage points lower than ACWI’s (0.18% vs. 0.32%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than ACWI over the past ten years.

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

Summary

IVW ACWI
Name iShares S&P 500 Growth ETF iShares MSCI ACWI ETF
Category Large Growth N/A
Issuer iShares iShares
AUM 35.72B 16.85B
Avg. Return 16.74% 10.21%
Div. Yield 0.61% 1.39%
Expense Ratio 0.18% 0.32%

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

IVW’s dividend yield is 0.78% lower than that of ACWI (0.61% vs. 1.39%). Also, IVW yielded on average 6.52% more per year over the past decade (16.74% vs. 10.21%). The expense ratio of IVW is 0.14 percentage points lower than ACWI’s (0.18% vs. 0.32%).

Fund Composition

Industry Exposure

IVW vs. ACWI - Industry Exposure

IVW ACWI
Technology 37.8% 20.41%
Industrials 5.72% 9.65%
Energy 0.06% 3.48%
Communication Services 15.44% 9.87%
Utilities 0.47% 2.61%
Healthcare 11.88% 11.74%
Consumer Defensive 3.84% 7.15%
Real Estate 1.11% 2.75%
Financial Services 6.78% 15.58%
Consumer Cyclical 15.25% 12.01%
Basic Materials 1.65% 4.73%

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

IVW is 17.39% more exposed to the Technology sector than ACWI (37.8% vs 20.41%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 5.57% higher and 3.24% higher respectively (15.44% vs. 9.87% and 15.25% vs. 12.01%). In total, Utilities, Real Estate, and Basic Materials also make up 6.86% less of the fund’s holdings compared to ACWI (3.23% vs. 10.09%).

Holdings

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
JPMorgan Chase & Co 0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

Risk Analysis

IVW ACWI
Mean Return 1.44 0.89
R-squared 93.82 99.96
Std. Deviation 13.77 14.05
Alpha 2.19 0.15
Beta 0.98 1
Sharpe Ratio 1.21 0.71
Treynor Ratio 17.24 9.45

The iShares S&P 500 Growth ETF (IVW) has a Sharpe Ratio of 1.21 with a Beta of 0.98 and a Alpha of 2.19. Its R-squared is 93.82 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a Mean Return of 1.44 and a Treynor Ratio of 17.24.

The iShares MSCI ACWI ETF (ACWI) has a R-squared of 99.96 with a Beta of 1 and a Sharpe Ratio of 0.71. Its Treynor Ratio is 9.45 while ACWI’s Alpha is 0.15. Furthermore, the fund has a Mean Return of 0.89 and a Standard Deviation of 14.05.

IVW’s Mean Return is 0.55 points higher than that of ACWI and its R-squared is 6.14 points lower. With a Standard Deviation of 13.77, IVW is slightly less volatile than ACWI. The Alpha and Beta of IVW are 2.04 points higher and 0.02 points lower than ACWI’s Alpha and Beta.

Performance

Annual Returns

IVW vs. ACWI - Annual Returns

Year IVW ACWI
2020 33.21% 16.38%
2019 30.91% 26.7%
2018 -0.17% -9.15%
2017 27.2% 24.35%
2016 6.74% 8.22%
2015 5.33% -2.39%
2014 14.67% 4.64%
2013 32.48% 22.91%
2012 14.39% 15.99%
2011 4.49% -7.6%
2010 14.84% 12.31%

IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% respectively.

The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

IVW vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $51,915 16.74%
ACWI $10,000 $27,241 10.21%

A $10,000 investment in IVW would have resulted in a final balance of $51,915. This is a profit of $41,915 over 11 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

With a $10,000 investment in ACWI, the end total would have been $27,241. This equates to a $17,241 profit over 11 years and a compound annual growth rate (CAGR) of 10.21%.

IVW’s CAGR is 6.52 percentage points higher than that of ACWI and as a result, would have yielded $24,674 more on a $10,000 investment. Thus, IVW outperformed ACWI by 6.52% annually.


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