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IWB vs. IAU: What’s The Difference?

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

The expense ratio of IWB is 0.10 percentage points lower than IAU’s (0.15% vs. 0.25%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than IAU over the past ten years.

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

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Summary

IWBIAU
NameiShares Russell 1000 ETFiShares Gold Trust
CategoryLarge BlendN/A
IssueriSharesiShares
AUM30.54B28.61B
Avg. Return14.64%6.03%
Div. Yield1.14%0.0%
Expense Ratio0.15%0.25%

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 Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

IWB’s dividend yield is 1.14% higher than that of IAU (1.14% vs. 0.0%). Also, IWB yielded on average 8.60% more per year over the past decade (14.64% vs. 6.03%). The expense ratio of IWB is 0.10 percentage points lower than IAU’s (0.15% vs. 0.25%).

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Fund Composition

Industry Exposure

IWB vs. IAU - Industry Exposure

IWBIAU
Technology25.33%0.0%
Industrials8.88%0.0%
Energy2.44%0.0%
Communication Services10.83%0.0%
Utilities2.36%0.0%
Healthcare13.35%0.0%
Consumer Defensive5.97%0.0%
Real Estate3.34%0.0%
Financial Services13.64%0.0%
Consumer Cyclical11.85%0.0%
Basic Materials2.02%0.0%

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 Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

IWB is 25.33% more exposed to the Technology sector than IAU (25.33% vs 0.0%). IWB’s exposure to Financial Services and Healthcare stocks is 13.64% higher and 13.35% higher respectively (13.64% vs. 0.0% and 13.35% vs. 0.0%). In total, Utilities, Energy, and Real Estate also make up 8.14% more of the fund’s holdings compared to IAU (8.14% vs. 0.00%).

Holdings

IWB - Holdings

IWB HoldingsWeight
Apple Inc5.45%
Microsoft Corp5.11%
Amazon.com Inc3.43%
Facebook Inc Class A2.03%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.82%
Tesla Inc1.27%
Berkshire Hathaway Inc Class B1.24%
NVIDIA Corp1.11%
JPMorgan Chase & Co1.09%

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%.

IAU - Holdings

IAU HoldingsWeight
Gold100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

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Risk Analysis

IWBIAU
Mean Return1.270.23
R-squared99.7316.03
Std. Deviation13.8716.97
Alpha-0.384.16
Beta1.020.48
Sharpe Ratio1.050.13
Treynor Ratio14.311.5

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 Standard Deviation is 13.87 while IWB’s Alpha is -0.38. Furthermore, the fund has a Sharpe Ratio of 1.05 and a Mean Return of 1.27.

The iShares Gold Trust (IAU) has a Alpha of 4.16 with a R-squared of 16.03 and a Sharpe Ratio of 0.13. Its Beta is 0.48 while IAU’s Treynor Ratio is 1.5. Furthermore, the fund has a Mean Return of 0.23 and a Standard Deviation of 16.97.

IWB’s Mean Return is 1.04 points higher than that of IAU and its R-squared is 83.70 points higher. With a Standard Deviation of 13.87, IWB is slightly less volatile than IAU. The Alpha and Beta of IWB are 4.54 points lower and 0.54 points higher than IAU’s Alpha and Beta.

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Performance

Annual Returns

IWB vs. IAU - Annual Returns

YearIWBIAU
202020.8%23.86%
201931.26%18.54%
2018-4.91%-1.39%
201721.53%11.58%
201611.91%8.85%
20150.82%-11.65%
201413.08%-0.44%
201332.93%-27.96%
201216.27%8.37%
20111.36%8.66%
201015.94%27.93%

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 2010 was the strongest year for IAU, returning 27.93% on an annual basis. The poorest year for IAU in the last ten years was 2013, with a yield of -27.96%. Most years the iShares Gold Trust has given investors modest returns, such as in 2012, 2011, and 2016, when gains were 8.37%, 8.66%, and 8.85% respectively.

Portfolio Growth

IWB vs. IAU - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWB$10,000$42,46214.64%
IAU$10,000$16,7866.03%

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 IAU, the end total would have been $16,786. This equates to a $6,786 profit over 11 years and a compound annual growth rate (CAGR) of 6.03%.

IWB’s CAGR is 8.60 percentage points higher than that of IAU and as a result, would have yielded $25,676 more on a $10,000 investment. Thus, IWB outperformed IAU by 8.60% annually.


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