IVW vs. IWS: What’s The Difference?

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

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

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

Summary

IVW IWS
Name iShares S&P 500 Growth ETF iShares Russell Mid-Cap Value ETF
Category Large Growth Mid-Cap Value
Issuer iShares iShares
AUM 35.72B 14.24B
Avg. Return 16.74% 12.35%
Div. Yield 0.61% 1.34%
Expense Ratio 0.18% 0.23%

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 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%.

IVW’s dividend yield is 0.73% lower than that of IWS (0.61% vs. 1.34%). Also, IVW yielded on average 4.39% more per year over the past decade (16.74% vs. 12.35%). The expense ratio of IVW is 0.05 percentage points lower than IWS’s (0.18% vs. 0.23%).

Fund Composition

Industry Exposure

IVW vs. IWS - Industry Exposure

IVW IWS
Technology 37.8% 11.39%
Industrials 5.72% 14.6%
Energy 0.06% 4.71%
Communication Services 15.44% 4.08%
Utilities 0.47% 6.97%
Healthcare 11.88% 8.56%
Consumer Defensive 3.84% 4.76%
Real Estate 1.11% 11.71%
Financial Services 6.78% 15.75%
Consumer Cyclical 15.25% 12.07%
Basic Materials 1.65% 5.4%

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 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%.

IVW is 26.41% more exposed to the Technology sector than IWS (37.8% vs 11.39%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 11.36% higher and 3.18% higher respectively (15.44% vs. 4.08% and 15.25% vs. 12.07%). In total, Utilities, Real Estate, and Basic Materials also make up 20.85% less of the fund’s holdings compared to IWS (3.23% vs. 24.08%).

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%.

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

IVW IWS
Mean Return 1.44 1.06
R-squared 93.82 87.04
Std. Deviation 13.77 16.03
Alpha 2.19 -4.11
Beta 0.98 1.1
Sharpe Ratio 1.21 0.75
Treynor Ratio 17.24 10.3

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

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

IVW’s Mean Return is 0.38 points higher than that of IWS and its R-squared is 6.78 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than IWS. The Alpha and Beta of IVW are 6.30 points higher and 0.12 points lower than IWS’s Alpha and Beta.

Performance

Annual Returns

IVW vs. IWS - Annual Returns

Year IVW IWS
2020 33.21% 4.76%
2019 30.91% 26.78%
2018 -0.17% -12.36%
2017 27.2% 13.1%
2016 6.74% 19.69%
2015 5.33% -4.93%
2014 14.67% 14.49%
2013 32.48% 33.11%
2012 14.39% 18.27%
2011 4.49% -1.55%
2010 14.84% 24.46%

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 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

IVW vs. IWS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $51,915 16.74%
IWS $10,000 $33,083 12.35%

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 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%.

IVW’s CAGR is 4.39 percentage points higher than that of IWS and as a result, would have yielded $18,832 more on a $10,000 investment. Thus, IVW outperformed IWS by 4.39% annually.


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