IVW vs. EMB: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between IVW and EMB? And which fund is better?

The expense ratio of IVW is 0.21 percentage points lower than EMB’s (0.18% vs. 0.39%). IVW also has a high exposure to the technology sector while EMB is mostly comprised of BBB bonds. Overall, IVW has provided higher returns than EMB over the past ten years.

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

Summary

IVW EMB
Name iShares S&P 500 Growth ETF iShares J.P. Morgan USD Emerging Markets Bond ETF
Category Large Growth Emerging Markets Bond
Issuer iShares iShares
AUM 35.72B 19.76B
Avg. Return 16.74% 6.43%
Div. Yield 0.61% 3.85%
Expense Ratio 0.18% 0.39%

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 J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.

IVW’s dividend yield is 3.24% lower than that of EMB (0.61% vs. 3.85%). Also, IVW yielded on average 10.30% more per year over the past decade (16.74% vs. 6.43%). The expense ratio of IVW is 0.21 percentage points lower than EMB’s (0.18% vs. 0.39%).

Fund Composition

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%.

EMB - Holdings

EMB Bond Sectors Weight
BBB 33.79%
B 21.97%
BB 16.92%
A 13.67%
AA 7.97%
Below B 4.49%
Others 1.11%
AAA 0.09%
US Government 0.0%

EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.

Risk Analysis

IVW EMB
Mean Return 1.44 0.44
R-squared 93.82 23.34
Std. Deviation 13.77 8.44
Alpha 2.19 0.89
Beta 0.98 1.36
Sharpe Ratio 1.21 0.55
Treynor Ratio 17.24 3.24

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

The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a Mean Return of 0.44 with a Standard Deviation of 8.44 and a Alpha of 0.89. Its Beta is 1.36 while EMB’s Treynor Ratio is 3.24. Furthermore, the fund has a Sharpe Ratio of 0.55 and a R-squared of 23.34.

IVW’s Mean Return is 1.00 points higher than that of EMB and its R-squared is 70.48 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than EMB. The Alpha and Beta of IVW are 1.30 points higher and 0.38 points lower than EMB’s Alpha and Beta.

Performance

Annual Returns

IVW vs. EMB - Annual Returns

Year IVW EMB
2020 33.21% 5.48%
2019 30.91% 15.57%
2018 -0.17% -5.67%
2017 27.2% 9.98%
2016 6.74% 9.41%
2015 5.33% 0.43%
2014 14.67% 6.69%
2013 32.48% -7.42%
2012 14.39% 17.64%
2011 4.49% 7.2%
2010 14.84% 11.47%

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 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.

Portfolio Growth

IVW vs. EMB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $51,915 16.74%
EMB $10,000 $19,295 6.43%

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 EMB, the end total would have been $19,295. This equates to a $9,295 profit over 11 years and a compound annual growth rate (CAGR) of 6.43%.

IVW’s CAGR is 10.30 percentage points higher than that of EMB and as a result, would have yielded $32,620 more on a $10,000 investment. Thus, IVW outperformed EMB by 10.30% annually.


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