The iShares Russell 1000 Value ETF (IWD) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and IWN is a iShares Small Value fund. So, what’s the difference between IWD and IWN? And which fund is better?
The expense ratio of IWD is 0.05 percentage points lower than IWN’s (0.19% vs. 0.24%). IWD also has a lower exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided higher returns than IWN over the past ten years.
In this article, we’ll compare IWD vs. IWN. We’ll look at annual returns and holdings, as well as at their performance and risk metrics. Moreover, I’ll also discuss IWD’s and IWN’s industry exposure, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Russell 1000 Value ETF||iShares Russell 2000 Value ETF|
|Category||Large Value||Small Value|
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 Russell 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.
IWD’s dividend yield is 0.31% higher than that of IWN (1.57% vs. 1.26%). Also, IWD yielded on average 0.44% more per year over the past decade (11.40% vs. 10.96%). The expense ratio of IWD is 0.05 percentage points lower than IWN’s (0.19% vs. 0.24%).
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 Russell 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.
IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.
IWD is 2.54% less exposed to the Financial Services sector than IWN (20.43% vs 22.97%). IWD’s exposure to Healthcare and Industrials stocks is 6.84% higher and 2.81% lower respectively (17.78% vs. 10.94% and 11.77% vs. 14.58%). In total, Energy, Utilities, and Real Estate also make up 10.31% less of the fund’s holdings compared to IWN (14.58% vs. 24.89%).
|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%|
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%.
|AMC Entertainment Holdings Inc Class A||1.06%|
|Tenet Healthcare Corp||0.47%|
|Stag Industrial Inc||0.47%|
|EMCOR Group Inc||0.42%|
|Valley National Bancorp||0.37%|
|Chesapeake Energy Corp Ordinary Shares – New||0.37%|
|Agree Realty Corp||0.36%|
|Essent Group Ltd||0.35%|
IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.
Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.
The iShares Russell 1000 Value ETF (IWD) has a Treynor Ratio of 11.06 with a Standard Deviation of 14.35 and a Beta of 1.02. Its Alpha is -3.23 while IWD’s R-squared is 92.38. Furthermore, the fund has a Sharpe Ratio of 0.81 and a Mean Return of 1.03.
The iShares Russell 2000 Value ETF (IWN) has a Beta of 1.21 with a Alpha of -6.32 and a Mean Return of 1.01. Its Standard Deviation is 19.28 while IWN’s Treynor Ratio is 8.3. Furthermore, the fund has a Sharpe Ratio of 0.59 and a R-squared of 72.64.
IWD’s Mean Return is 0.02 points higher than that of IWN and its R-squared is 19.74 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than IWN. The Alpha and Beta of IWD are 3.09 points higher and 0.19 points lower than IWN’s Alpha and Beta.
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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IWN, the end total would have been $28,189. This equates to a $18,189 profit over 11 years and a compound annual growth rate (CAGR) of 10.96%.
IWD’s CAGR is 0.44 percentage points higher than that of IWN and as a result, would have yielded $2,557 more on a $10,000 investment. Thus, IWD outperformed IWN by 0.44% annually.
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