The iShares Russell 1000 Value ETF (IWD) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between IWD and IWP? And which fund is better?
The expense ratio of IWD is 0.05 percentage points lower than IWP’s (0.19% vs. 0.24%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided lower returns than IWP over the past ten years.
In this article, we’ll compare IWD vs. IWP. We’ll look at industry exposure and risk metrics, as well as at their performance and fund composition. Moreover, I’ll also discuss IWD’s and IWP’s portfolio growth, annual returns, and holdings and examine how these affect their overall returns.
Summary
| IWD | IWP | |
| Name | iShares Russell 1000 Value ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Large Value | Mid-Cap Growth |
| Issuer | iShares | iShares |
| AUM | 54.1B | 15.7B |
| Avg. Return | 11.40% | 16.75% |
| Div. Yield | 1.57% | 0.26% |
| Expense Ratio | 0.19% | 0.24% |
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 Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
IWD’s dividend yield is 1.31% higher than that of IWP (1.57% vs. 0.26%). Also, IWD yielded on average 5.35% less per year over the past decade (11.40% vs. 16.75%). The expense ratio of IWD is 0.05 percentage points lower than IWP’s (0.19% vs. 0.24%).
Fund Composition
Industry Exposure
| IWD | IWP | |
| Technology | 10.28% | 33.88% |
| Industrials | 11.77% | 14.09% |
| Energy | 4.76% | 1.51% |
| Communication Services | 8.67% | 6.32% |
| Utilities | 4.88% | 0.16% |
| Healthcare | 17.78% | 16.79% |
| Consumer Defensive | 7.76% | 2.32% |
| Real Estate | 4.94% | 2.46% |
| Financial Services | 20.43% | 4.52% |
| Consumer Cyclical | 5.62% | 16.09% |
| Basic Materials | 3.1% | 1.86% |
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 Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
IWD is 15.91% more exposed to the Financial Services sector than IWP (20.43% vs 4.52%). IWD’s exposure to Healthcare and Industrials stocks is 0.99% higher and 2.32% lower respectively (17.78% vs. 16.79% and 11.77% vs. 14.09%). In total, Energy, Utilities, and Real Estate also make up 10.45% more of the fund’s holdings compared to IWP (14.58% vs. 4.13%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| IWD | IWP | |
| Mean Return | 1.03 | 1.27 |
| R-squared | 92.38 | 87.01 |
| Std. Deviation | 14.35 | 16.05 |
| Alpha | -3.23 | -1.03 |
| Beta | 1.02 | 1.1 |
| Sharpe Ratio | 0.81 | 0.91 |
| Treynor Ratio | 11.06 | 12.98 |
The iShares Russell 1000 Value ETF (IWD) has a Mean Return of 1.03 with a Treynor Ratio of 11.06 and a Alpha of -3.23. Its R-squared is 92.38 while IWD’s Standard Deviation is 14.35. Furthermore, the fund has a Sharpe Ratio of 0.81 and a Beta of 1.02.
The iShares Russell Mid-Cap Growth ETF (IWP) has a R-squared of 87.01 with a Beta of 1.1 and a Sharpe Ratio of 0.91. Its Standard Deviation is 16.05 while IWP’s Alpha is -1.03. Furthermore, the fund has a Mean Return of 1.27 and a Treynor Ratio of 12.98.
IWD’s Mean Return is 0.24 points lower than that of IWP and its R-squared is 5.37 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than IWP. The Alpha and Beta of IWD are 2.20 points lower and 0.08 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | IWP |
| 2020 | 2.67% | 35.29% |
| 2019 | 26.34% | 35.14% |
| 2018 | -8.4% | -4.95% |
| 2017 | 13.47% | 24.98% |
| 2016 | 17.09% | 7.15% |
| 2015 | -3.95% | -0.39% |
| 2014 | 13.21% | 11.68% |
| 2013 | 32.18% | 35.44% |
| 2012 | 17.28% | 15.62% |
| 2011 | 0.21% | -1.82% |
| 2010 | 15.3% | 26.1% |
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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWD | $10,000 | $30,746 | 11.40% |
| IWP | $10,000 | $50,191 | 16.75% |
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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.
IWD’s CAGR is 5.35 percentage points lower than that of IWP and as a result, would have yielded $19,445 less on a $10,000 investment. Thus, IWD performed worse than IWP by 5.35% annually.
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