The iShares Russell 1000 Value ETF (IWD) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between IWD and IWS? And which fund is better?
The expense ratio of IWD is 0.04 percentage points lower than IWS’s (0.19% vs. 0.23%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided lower returns than IWS over the past ten years.
In this article, we’ll compare IWD vs. IWS. We’ll look at industry exposure and annual returns, as well as at their holdings and fund composition. Moreover, I’ll also discuss IWD’s and IWS’s performance, portfolio growth, and risk metrics and examine how these affect their overall returns.
|Name||iShares Russell 1000 Value ETF||iShares Russell Mid-Cap Value ETF|
|Category||Large Value||Mid-Cap 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 Mid-Cap Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
IWD’s dividend yield is 0.23% higher than that of IWS (1.57% vs. 1.34%). Also, IWD yielded on average 0.95% less per year over the past decade (11.40% vs. 12.35%). The expense ratio of IWD is 0.04 percentage points lower than IWS’s (0.19% vs. 0.23%).
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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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.
IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.
IWD is 4.68% more exposed to the Financial Services sector than IWS (20.43% vs 15.75%). IWD’s exposure to Healthcare and Industrials stocks is 9.22% higher and 2.83% lower respectively (17.78% vs. 8.56% and 11.77% vs. 14.6%). In total, Energy, Utilities, and Real Estate also make up 8.81% less of the fund’s holdings compared to IWS (14.58% vs. 23.39%).
|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%.
|Marvell Technology Inc||0.69%|
|IHS Markit Ltd||0.62%|
|Prudential Financial Inc||0.56%|
|Otis Worldwide Corp Ordinary Shares||0.54%|
|International Flavors & Fragrances Inc||0.53%|
|Xcel Energy Inc||0.52%|
|Motorola Solutions Inc||0.52%|
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
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The iShares Russell 1000 Value ETF (IWD) has a Treynor Ratio of 11.06 with a Mean Return of 1.03 and a Beta of 1.02. Its Alpha is -3.23 while IWD’s Sharpe Ratio is 0.81. Furthermore, the fund has a Standard Deviation of 14.35 and a R-squared of 92.38.
The iShares Russell Mid-Cap Value ETF (IWS) has a Treynor Ratio of 10.3 with a Mean Return of 1.06 and a Beta of 1.1. Its Standard Deviation is 16.03 while IWS’s Alpha is -4.11. Furthermore, the fund has a R-squared of 87.04 and a Sharpe Ratio of 0.75.
IWD’s Mean Return is 0.03 points lower than that of IWS and its R-squared is 5.34 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than IWS. The Alpha and Beta of IWD are 0.88 points higher and 0.08 points lower than IWS’s Alpha and Beta.
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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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% 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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.
IWD’s CAGR is 0.95 percentage points lower than that of IWS and as a result, would have yielded $2,337 less on a $10,000 investment. Thus, IWD performed worse than IWS by 0.95% annually.
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