IWD vs. DIA: What’s The Difference?

The iShares Russell 1000 Value ETF (IWD) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between IWD and DIA? And which fund is better?

The expense ratio of IWD is 0.03 percentage points higher than DIA’s (0.19% vs. 0.16%). IWD also has a lower exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided lower returns than DIA over the past ten years.

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

Summary

IWD DIA
Name iShares Russell 1000 Value ETF SPDR Dow Jones Industrial Average ETF Trust
Category Large Value Large Value
Issuer iShares SPDR State Street Global Advisors
AUM 54.1B 30.46B
Avg. Return 11.40% 13.35%
Div. Yield 1.57% 1.61%
Expense Ratio 0.19% 0.16%

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 SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

IWD’s dividend yield is 0.04% lower than that of DIA (1.57% vs. 1.61%). Also, IWD yielded on average 1.95% less per year over the past decade (11.40% vs. 13.35%). The expense ratio of IWD is 0.03 percentage points higher than DIA’s (0.19% vs. 0.16%).

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Fund Composition

Industry Exposure

IWD vs. DIA - Industry Exposure

IWD DIA
Technology 10.28% 17.32%
Industrials 11.77% 16.7%
Energy 4.76% 2.0%
Communication Services 8.67% 4.42%
Utilities 4.88% 0.0%
Healthcare 17.78% 17.92%
Consumer Defensive 7.76% 6.3%
Real Estate 4.94% 0.0%
Financial Services 20.43% 20.68%
Consumer Cyclical 5.62% 13.44%
Basic Materials 3.1% 1.21%

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 SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

IWD is 0.25% less exposed to the Financial Services sector than DIA (20.43% vs 20.68%). IWD’s exposure to Healthcare and Industrials stocks is 0.14% lower and 4.93% lower respectively (17.78% vs. 17.92% and 11.77% vs. 16.7%). In total, Energy, Utilities, and Real Estate also make up 12.58% more of the fund’s holdings compared to DIA (14.58% vs. 2.00%).

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%.

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

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Risk Analysis

IWD DIA
Mean Return 1.03 1.13
R-squared 92.38 93.31
Std. Deviation 14.35 13.68
Alpha -3.23 -0.94
Beta 1.02 0.97
Sharpe Ratio 0.81 0.94
Treynor Ratio 11.06 13.07

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

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a R-squared of 93.31 with a Alpha of -0.94 and a Standard Deviation of 13.68. Its Mean Return is 1.13 while DIA’s Treynor Ratio is 13.07. Furthermore, the fund has a Beta of 0.97 and a Sharpe Ratio of 0.94.

IWD’s Mean Return is 0.10 points lower than that of DIA and its R-squared is 0.93 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than DIA. The Alpha and Beta of IWD are 2.29 points lower and 0.05 points higher than DIA’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. DIA - Annual Returns

Year IWD DIA
2020 2.67% 9.63%
2019 26.34% 25.09%
2018 -8.4% -3.6%
2017 13.47% 27.97%
2016 17.09% 16.28%
2015 -3.95% 0.1%
2014 13.21% 9.88%
2013 32.18% 29.41%
2012 17.28% 10.04%
2011 0.21% 8.21%
2010 15.3% 13.87%

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 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.

Portfolio Growth

IWD vs. DIA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
DIA $10,000 $37,965 13.35%

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 DIA, the end total would have been $37,965. This equates to a $27,965 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.

IWD’s CAGR is 1.95 percentage points lower than that of DIA and as a result, would have yielded $7,219 less on a $10,000 investment. Thus, IWD performed worse than DIA by 1.95% annually.


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