IWD vs. ACWI: What’s The Difference?

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

The expense ratio of IWD is 0.13 percentage points lower than ACWI’s (0.19% vs. 0.32%). IWD also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided higher returns than ACWI over the past ten years.

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

Summary

IWD ACWI
Name iShares Russell 1000 Value ETF iShares MSCI ACWI ETF
Category Large Value N/A
Issuer iShares iShares
AUM 54.1B 16.85B
Avg. Return 11.40% 10.21%
Div. Yield 1.57% 1.39%
Expense Ratio 0.19% 0.32%

The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.

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%.

IWD’s dividend yield is 0.18% higher than that of ACWI (1.57% vs. 1.39%). Also, IWD yielded on average 1.19% more per year over the past decade (11.40% vs. 10.21%). The expense ratio of IWD is 0.13 percentage points lower than ACWI’s (0.19% vs. 0.32%).

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Fund Composition

Industry Exposure

IWD vs. ACWI - Industry Exposure

IWD ACWI
Technology 10.28% 20.41%
Industrials 11.77% 9.65%
Energy 4.76% 3.48%
Communication Services 8.67% 9.87%
Utilities 4.88% 2.61%
Healthcare 17.78% 11.74%
Consumer Defensive 7.76% 7.15%
Real Estate 4.94% 2.75%
Financial Services 20.43% 15.58%
Consumer Cyclical 5.62% 12.01%
Basic Materials 3.1% 4.73%

The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.

IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.

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%.

IWD is 4.85% more exposed to the Financial Services sector than ACWI (20.43% vs 15.58%). IWD’s exposure to Healthcare and Industrials stocks is 6.04% higher and 2.12% higher respectively (17.78% vs. 11.74% and 11.77% vs. 9.65%). In total, Energy, Utilities, and Real Estate also make up 5.74% more of the fund’s holdings compared to ACWI (14.58% vs. 8.84%).

Holdings

IWD - Holdings

IWD Holdings Weight
Berkshire Hathaway Inc Class B 2.58%
JPMorgan Chase & Co 2.25%
Johnson & Johnson 2.24%
UnitedHealth Group Inc 1.78%
Procter & Gamble Co 1.71%
The Walt Disney Co 1.5%
Bank of America Corp 1.43%
Comcast Corp Class A 1.33%
Exxon Mobil Corp 1.2%
Pfizer Inc 1.18%

IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.

The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.

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%.

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Risk Analysis

IWD ACWI
Mean Return 1.03 0.89
R-squared 92.38 99.96
Std. Deviation 14.35 14.05
Alpha -3.23 0.15
Beta 1.02 1
Sharpe Ratio 0.81 0.71
Treynor Ratio 11.06 9.45

The iShares Russell 1000 Value ETF (IWD) has a R-squared of 92.38 with a Alpha of -3.23 and a Sharpe Ratio of 0.81. Its Beta is 1.02 while IWD’s Standard Deviation is 14.35. Furthermore, the fund has a Treynor Ratio of 11.06 and a Mean Return of 1.03.

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

IWD’s Mean Return is 0.14 points higher than that of ACWI and its R-squared is 7.58 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than ACWI. The Alpha and Beta of IWD are 3.38 points lower and 0.02 points higher than ACWI’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. ACWI - Annual Returns

Year IWD ACWI
2020 2.67% 16.38%
2019 26.34% 26.7%
2018 -8.4% -9.15%
2017 13.47% 24.35%
2016 17.09% 8.22%
2015 -3.95% -2.39%
2014 13.21% 4.64%
2013 32.18% 22.91%
2012 17.28% 15.99%
2011 0.21% -7.6%
2010 15.3% 12.31%

IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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

IWD vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
ACWI $10,000 $27,241 10.21%

A $10,000 investment in IWD would have resulted in a final balance of $30,746. This is a profit of $20,746 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.40%.

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%.

IWD’s CAGR is 1.19 percentage points higher than that of ACWI and as a result, would have yielded $3,505 more on a $10,000 investment. Thus, IWD outperformed ACWI by 1.19% annually.


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