The iShares Russell 1000 Growth ETF (IWF) and the iShares Russell 2000 ETF (IWM) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and IWM is a iShares Small Blend fund. So, what’s the difference between IWF and IWM? And which fund is better?
IWF and IWM have the same expense ratio: 0.19%. IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than IWM over the past ten years.
In this article, we’ll compare IWF vs. IWM. We’ll look at performance and holdings, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss IWF’s and IWM’s annual returns, portfolio growth, and risk metrics and examine how these affect their overall returns.
Summary
| IWF | IWM | |
| Name | iShares Russell 1000 Growth ETF | iShares Russell 2000 ETF |
| Category | Large Growth | Small Blend |
| Issuer | iShares | iShares |
| AUM | 72.16B | 66.48B |
| Avg. Return | 17.72% | 13.52% |
| Div. Yield | 0.52% | 0.86% |
| Expense Ratio | 0.19% | 0.19% |
The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.
The iShares Russell 2000 ETF (IWM) is a Small Blend fund that is issued by iShares. It currently has 66.48B total assets under management and has yielded an average annual return of 13.52% over the past 10 years. The fund has a dividend yield of 0.86% with an expense ratio of 0.19%.
IWF’s dividend yield is 0.34% lower than that of IWM (0.52% vs. 0.86%). Also, IWF yielded on average 4.20% more per year over the past decade (17.72% vs. 13.52%). IWF and IWM have the same expense ratio: 0.19%.
Fund Composition
Industry Exposure
| IWF | IWM | |
| Technology | 39.29% | 14.21% |
| Industrials | 6.19% | 14.78% |
| Energy | 0.28% | 3.74% |
| Communication Services | 12.82% | 3.79% |
| Utilities | 0.03% | 2.44% |
| Healthcare | 9.23% | 20.3% |
| Consumer Defensive | 4.31% | 3.65% |
| Real Estate | 1.85% | 8.59% |
| Financial Services | 7.36% | 13.76% |
| Consumer Cyclical | 17.62% | 10.99% |
| Basic Materials | 1.01% | 3.74% |
The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.
IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.
The iShares Russell 2000 ETF (IWM) has the most exposure to the Healthcare sector at 20.3%. This is followed by Industrials and Technology at 14.78% and 14.21% respectively. Consumer Defensive (3.65%), Basic Materials (3.74%), and Energy (3.74%) only make up 11.13% of the fund’s total assets.
IWM’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.79%, 8.59%, 10.99%, 13.76%, and 14.21%.
IWF is 25.08% more exposed to the Technology sector than IWM (39.29% vs 14.21%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 6.63% higher and 9.03% higher respectively (17.62% vs. 10.99% and 12.82% vs. 3.79%). In total, Energy, Basic Materials, and Real Estate also make up 12.93% less of the fund’s holdings compared to IWM (3.14% vs. 16.07%).
Holdings
| IWF Holdings | Weight |
| Apple Inc | 10.51% |
| Microsoft Corp | 9.85% |
| Amazon.com Inc | 6.63% |
| Facebook Inc Class A | 3.91% |
| Alphabet Inc Class A | 3.2% |
| Alphabet Inc Class C | 3.03% |
| Tesla Inc | 2.45% |
| NVIDIA Corp | 2.14% |
| Visa Inc Class A | 1.91% |
| The Home Depot Inc | 1.62% |
IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.
Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.
| IWM Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.52% |
| Intellia Therapeutics Inc | 0.33% |
| Crocs Inc | 0.3% |
| BlackRock Cash Funds Treasury SL Agency | 0.29% |
| Tenet Healthcare Corp | 0.26% |
| Lattice Semiconductor Corp | 0.26% |
| Tetra Tech Inc | 0.25% |
| II-VI Inc | 0.25% |
| EastGroup Properties Inc | 0.24% |
| Arrowhead Pharmaceuticals Inc | 0.24% |
IWM’s Top Holdings are AMC Entertainment Holdings Inc Class A, Intellia Therapeutics Inc, Crocs Inc, BlackRock Cash Funds Treasury SL Agency, and Tenet Healthcare Corp at 0.52%, 0.33%, 0.3%, 0.29%, and 0.26%.
Lattice Semiconductor Corp (0.26%), Tetra Tech Inc (0.25%), and II-VI Inc (0.25%) have a slightly smaller but still significant weight. EastGroup Properties Inc and Arrowhead Pharmaceuticals Inc are also represented in the IWM’s holdings at 0.24% and 0.24%.
Risk Analysis
| IWF | IWM | |
| Mean Return | 1.48 | 1.12 |
| R-squared | 92.93 | 77.73 |
| Std. Deviation | 14.42 | 18.87 |
| Alpha | 2.16 | -5.12 |
| Beta | 1.03 | 1.23 |
| Sharpe Ratio | 1.19 | 0.68 |
| Treynor Ratio | 17.1 | 9.56 |
The iShares Russell 1000 Growth ETF (IWF) has a Alpha of 2.16 with a Sharpe Ratio of 1.19 and a Treynor Ratio of 17.1. Its Mean Return is 1.48 while IWF’s Beta is 1.03. Furthermore, the fund has a R-squared of 92.93 and a Standard Deviation of 14.42.
The iShares Russell 2000 ETF (IWM) has a Alpha of -5.12 with a R-squared of 77.73 and a Beta of 1.23. Its Standard Deviation is 18.87 while IWM’s Mean Return is 1.12. Furthermore, the fund has a Sharpe Ratio of 0.68 and a Treynor Ratio of 9.56.
IWF’s Mean Return is 0.36 points higher than that of IWM and its R-squared is 15.20 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than IWM. The Alpha and Beta of IWF are 7.28 points higher and 0.20 points lower than IWM’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | IWM |
| 2020 | 38.21% | 19.89% |
| 2019 | 36.08% | 25.42% |
| 2018 | -1.68% | -11.02% |
| 2017 | 29.96% | 14.66% |
| 2016 | 6.92% | 21.36% |
| 2015 | 5.48% | -4.33% |
| 2014 | 12.84% | 4.94% |
| 2013 | 33.19% | 38.85% |
| 2012 | 15.03% | 16.39% |
| 2011 | 2.47% | -4.19% |
| 2010 | 16.47% | 26.76% |
IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% respectively.
The year 2013 was the strongest year for IWM, returning 38.85% on an annual basis. The poorest year for IWM in the last ten years was 2018, with a yield of -11.02%. Most years the iShares Russell 2000 ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 14.66%, 16.39%, and 19.89% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $55,920 | 17.72% |
| IWM | $10,000 | $36,686 | 13.52% |
A $10,000 investment in IWF would have resulted in a final balance of $55,920. This is a profit of $45,920 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
With a $10,000 investment in IWM, the end total would have been $36,686. This equates to a $26,686 profit over 11 years and a compound annual growth rate (CAGR) of 13.52%.
IWF’s CAGR is 4.20 percentage points higher than that of IWM and as a result, would have yielded $19,234 more on a $10,000 investment. Thus, IWF outperformed IWM by 4.20% annually.
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