IWD vs. EFV: What’s The Difference?

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

The expense ratio of IWD is 0.20 percentage points lower than EFV’s (0.19% vs. 0.39%). IWD also has a lower exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided higher returns than EFV over the past ten years.

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

Summary

IWD EFV
Name iShares Russell 1000 Value ETF iShares MSCI EAFE Value ETF
Category Large Value Foreign Large Value
Issuer iShares iShares
AUM 54.1B 14.37B
Avg. Return 11.40% 3.99%
Div. Yield 1.57% 2.94%
Expense Ratio 0.19% 0.39%

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 EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

IWD’s dividend yield is 1.37% lower than that of EFV (1.57% vs. 2.94%). Also, IWD yielded on average 7.41% more per year over the past decade (11.40% vs. 3.99%). The expense ratio of IWD is 0.20 percentage points lower than EFV’s (0.19% vs. 0.39%).

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Fund Composition

Industry Exposure

IWD vs. EFV - Industry Exposure

IWD EFV
Technology 10.28% 2.98%
Industrials 11.77% 11.6%
Energy 4.76% 6.6%
Communication Services 8.67% 6.46%
Utilities 4.88% 6.14%
Healthcare 17.78% 9.19%
Consumer Defensive 7.76% 6.82%
Real Estate 4.94% 5.06%
Financial Services 20.43% 26.55%
Consumer Cyclical 5.62% 9.0%
Basic Materials 3.1% 9.59%

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 EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

IWD is 6.12% less exposed to the Financial Services sector than EFV (20.43% vs 26.55%). IWD’s exposure to Healthcare and Industrials stocks is 8.59% higher and 0.17% higher respectively (17.78% vs. 9.19% and 11.77% vs. 11.6%). In total, Energy, Utilities, and Real Estate also make up 3.22% less of the fund’s holdings compared to EFV (14.58% vs. 17.80%).

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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

IWD EFV
Mean Return 1.03 0.42
R-squared 92.38 92.15
Std. Deviation 14.35 16.53
Alpha -3.23 -1.77
Beta 1.02 1.05
Sharpe Ratio 0.81 0.26
Treynor Ratio 11.06 2.92

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

The iShares MSCI EAFE Value ETF (EFV) has a Alpha of -1.77 with a Mean Return of 0.42 and a R-squared of 92.15. Its Treynor Ratio is 2.92 while EFV’s Beta is 1.05. Furthermore, the fund has a Standard Deviation of 16.53 and a Sharpe Ratio of 0.26.

IWD’s Mean Return is 0.61 points higher than that of EFV and its R-squared is 0.23 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than EFV. The Alpha and Beta of IWD are 1.46 points lower and 0.03 points lower than EFV’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. EFV - Annual Returns

Year IWD EFV
2020 2.67% -2.78%
2019 26.34% 15.97%
2018 -8.4% -14.88%
2017 13.47% 21.22%
2016 17.09% 4.87%
2015 -3.95% -5.89%
2014 13.21% -5.65%
2013 32.18% 22.61%
2012 17.28% 17.52%
2011 0.21% -12.24%
2010 15.3% 3.18%

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 EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

IWD vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
EFV $10,000 $14,134 3.99%

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 EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

IWD’s CAGR is 7.41 percentage points higher than that of EFV and as a result, would have yielded $16,612 more on a $10,000 investment. Thus, IWD outperformed EFV by 7.41% annually.


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