IWD vs. IAU: What’s The Difference?

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

The expense ratio of IWD is 0.06 percentage points lower than IAU’s (0.19% vs. 0.25%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided higher returns than IAU over the past ten years.

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

Summary

IWD IAU
Name iShares Russell 1000 Value ETF iShares Gold Trust
Category Large Value N/A
Issuer iShares iShares
AUM 54.1B 28.61B
Avg. Return 11.40% 6.03%
Div. Yield 1.57% 0.0%
Expense Ratio 0.19% 0.25%

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 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%.

IWD’s dividend yield is 1.57% higher than that of IAU (1.57% vs. 0.0%). Also, IWD yielded on average 5.37% more per year over the past decade (11.40% vs. 6.03%). The expense ratio of IWD is 0.06 percentage points lower than IAU’s (0.19% vs. 0.25%).

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Fund Composition

Industry Exposure

IWD vs. IAU - Industry Exposure

IWD IAU
Technology 10.28% 0.0%
Industrials 11.77% 0.0%
Energy 4.76% 0.0%
Communication Services 8.67% 0.0%
Utilities 4.88% 0.0%
Healthcare 17.78% 0.0%
Consumer Defensive 7.76% 0.0%
Real Estate 4.94% 0.0%
Financial Services 20.43% 0.0%
Consumer Cyclical 5.62% 0.0%
Basic Materials 3.1% 0.0%

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 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%.

IWD is 20.43% more exposed to the Financial Services sector than IAU (20.43% vs 0.0%). IWD’s exposure to Healthcare and Industrials stocks is 17.78% higher and 11.77% higher respectively (17.78% vs. 0.0% and 11.77% vs. 0.0%). In total, Energy, Utilities, and Real Estate also make up 14.58% more of the fund’s holdings compared to IAU (14.58% vs. 0.00%).

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%.

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

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

IWD IAU
Mean Return 1.03 0.23
R-squared 92.38 16.03
Std. Deviation 14.35 16.97
Alpha -3.23 4.16
Beta 1.02 0.48
Sharpe Ratio 0.81 0.13
Treynor Ratio 11.06 1.5

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

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

IWD’s Mean Return is 0.80 points higher than that of IAU and its R-squared is 76.35 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than IAU. The Alpha and Beta of IWD are 7.39 points lower and 0.54 points higher than IAU’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. IAU - Annual Returns

Year IWD IAU
2020 2.67% 23.86%
2019 26.34% 18.54%
2018 -8.4% -1.39%
2017 13.47% 11.58%
2016 17.09% 8.85%
2015 -3.95% -11.65%
2014 13.21% -0.44%
2013 32.18% -27.96%
2012 17.28% 8.37%
2011 0.21% 8.66%
2010 15.3% 27.93%

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 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

IWD vs. IAU - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
IAU $10,000 $16,786 6.03%

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 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%.

IWD’s CAGR is 5.37 percentage points higher than that of IAU and as a result, would have yielded $13,960 more on a $10,000 investment. Thus, IWD outperformed IAU by 5.37% annually.


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