IWB vs. ACWI: What’s The Difference?

The iShares Russell 1000 ETF (IWB) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between IWB and ACWI? And which fund is better?

The expense ratio of IWB is 0.17 percentage points lower than ACWI’s (0.15% vs. 0.32%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than ACWI over the past ten years.

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

Summary

IWB ACWI
Name iShares Russell 1000 ETF iShares MSCI ACWI ETF
Category Large Blend N/A
Issuer iShares iShares
AUM 30.54B 16.85B
Avg. Return 14.64% 10.21%
Div. Yield 1.14% 1.39%
Expense Ratio 0.15% 0.32%

The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

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%.

IWB’s dividend yield is 0.25% lower than that of ACWI (1.14% vs. 1.39%). Also, IWB yielded on average 4.42% more per year over the past decade (14.64% vs. 10.21%). The expense ratio of IWB is 0.17 percentage points lower than ACWI’s (0.15% vs. 0.32%).

Fund Composition

Industry Exposure

IWB vs. ACWI - Industry Exposure

IWB ACWI
Technology 25.33% 20.41%
Industrials 8.88% 9.65%
Energy 2.44% 3.48%
Communication Services 10.83% 9.87%
Utilities 2.36% 2.61%
Healthcare 13.35% 11.74%
Consumer Defensive 5.97% 7.15%
Real Estate 3.34% 2.75%
Financial Services 13.64% 15.58%
Consumer Cyclical 11.85% 12.01%
Basic Materials 2.02% 4.73%

The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

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%.

IWB is 4.92% more exposed to the Technology sector than ACWI (25.33% vs 20.41%). IWB’s exposure to Financial Services and Healthcare stocks is 1.94% lower and 1.61% higher respectively (13.64% vs. 15.58% and 13.35% vs. 11.74%). In total, Utilities, Energy, and Real Estate also make up 0.70% less of the fund’s holdings compared to ACWI (8.14% vs. 8.84%).

Holdings

IWB - Holdings

IWB Holdings Weight
Apple Inc 5.45%
Microsoft Corp 5.11%
Amazon.com Inc 3.43%
Facebook Inc Class A 2.03%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.82%
Tesla Inc 1.27%
Berkshire Hathaway Inc Class B 1.24%
NVIDIA Corp 1.11%
JPMorgan Chase & Co 1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

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

IWB ACWI
Mean Return 1.27 0.89
R-squared 99.73 99.96
Std. Deviation 13.87 14.05
Alpha -0.38 0.15
Beta 1.02 1
Sharpe Ratio 1.05 0.71
Treynor Ratio 14.31 9.45

The iShares Russell 1000 ETF (IWB) has a Beta of 1.02 with a R-squared of 99.73 and a Treynor Ratio of 14.31. Its Sharpe Ratio is 1.05 while IWB’s Standard Deviation is 13.87. Furthermore, the fund has a Alpha of -0.38 and a Mean Return of 1.27.

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

IWB’s Mean Return is 0.38 points higher than that of ACWI and its R-squared is 0.23 points lower. With a Standard Deviation of 13.87, IWB is slightly less volatile than ACWI. The Alpha and Beta of IWB are 0.53 points lower and 0.02 points higher than ACWI’s Alpha and Beta.

Performance

Annual Returns

IWB vs. ACWI - Annual Returns

Year IWB ACWI
2020 20.8% 16.38%
2019 31.26% 26.7%
2018 -4.91% -9.15%
2017 21.53% 24.35%
2016 11.91% 8.22%
2015 0.82% -2.39%
2014 13.08% 4.64%
2013 32.93% 22.91%
2012 16.27% 15.99%
2011 1.36% -7.6%
2010 15.94% 12.31%

IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% 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

IWB vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWB $10,000 $42,462 14.64%
ACWI $10,000 $27,241 10.21%

A $10,000 investment in IWB would have resulted in a final balance of $42,462. This is a profit of $32,462 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.64%.

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%.

IWB’s CAGR is 4.42 percentage points higher than that of ACWI and as a result, would have yielded $15,221 more on a $10,000 investment. Thus, IWB outperformed ACWI by 4.42% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply