IWM vs. GLD: What’s The Difference?

The iShares Russell 2000 ETF (IWM) and the SPDR Gold Shares (GLD) are both among the Top 100 ETFs. IWM is a iShares Small Blend fund and GLD is a SPDR State Street Global Advisors N/A fund. So, what’s the difference between IWM and GLD? And which fund is better?

The expense ratio of IWM is 0.21 percentage points lower than GLD’s (0.19% vs. 0.4%). IWM also has a higher exposure to the healthcare sector and a higher standard deviation. Overall, IWM has provided higher returns than GLD over the past ten years.

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

Summary

IWM GLD
Name iShares Russell 2000 ETF SPDR Gold Shares
Category Small Blend N/A
Issuer iShares SPDR State Street Global Advisors
AUM 66.48B 59.26B
Avg. Return 13.52% 5.81%
Div. Yield 0.86% 0.0%
Expense Ratio 0.19% 0.4%

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%.

The SPDR Gold Shares (GLD) is a N/A fund that is issued by SPDR State Street Global Advisors. It currently has 59.26B total assets under management and has yielded an average annual return of 5.81% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.4%.

IWM’s dividend yield is 0.86% higher than that of GLD (0.86% vs. 0.0%). Also, IWM yielded on average 7.72% more per year over the past decade (13.52% vs. 5.81%). The expense ratio of IWM is 0.21 percentage points lower than GLD’s (0.19% vs. 0.4%).

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Fund Composition

Industry Exposure

IWM vs. GLD - Industry Exposure

IWM GLD
Technology 14.21% 0.0%
Industrials 14.78% 0.0%
Energy 3.74% 0.0%
Communication Services 3.79% 0.0%
Utilities 2.44% 0.0%
Healthcare 20.3% 0.0%
Consumer Defensive 3.65% 0.0%
Real Estate 8.59% 0.0%
Financial Services 13.76% 0.0%
Consumer Cyclical 10.99% 0.0%
Basic Materials 3.74% 0.0%

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%.

The SPDR Gold Shares (GLD) 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.

GLD’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%.

IWM is 20.30% more exposed to the Healthcare sector than GLD (20.3% vs 0.0%). IWM’s exposure to Industrials and Technology stocks is 14.78% higher and 14.21% higher respectively (14.78% vs. 0.0% and 14.21% vs. 0.0%). In total, Consumer Defensive, Basic Materials, and Energy also make up 11.13% more of the fund’s holdings compared to GLD (11.13% vs. 0.00%).

Holdings

IWM - Holdings

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%.

GLD - Holdings

GLD Holdings Weight
Gold Trust 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%

GLD’s Top Holdings are Gold Trust, 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 GLD’s holdings at 0% and 0%.

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Risk Analysis

IWM GLD
Mean Return 1.12 0.21
R-squared 77.73 16.21
Std. Deviation 18.87 16.58
Alpha -5.12 3.91
Beta 1.23 0.48
Sharpe Ratio 0.68 0.12
Treynor Ratio 9.56 1.21

The iShares Russell 2000 ETF (IWM) has a R-squared of 77.73 with a Treynor Ratio of 9.56 and a Sharpe Ratio of 0.68. Its Mean Return is 1.12 while IWM’s Alpha is -5.12. Furthermore, the fund has a Beta of 1.23 and a Standard Deviation of 18.87.

The SPDR Gold Shares (GLD) has a R-squared of 16.21 with a Sharpe Ratio of 0.12 and a Mean Return of 0.21. Its Alpha is 3.91 while GLD’s Treynor Ratio is 1.21. Furthermore, the fund has a Standard Deviation of 16.58 and a Beta of 0.48.

IWM’s Mean Return is 0.91 points higher than that of GLD and its R-squared is 61.52 points higher. With a Standard Deviation of 18.87, IWM is slightly more volatile than GLD. The Alpha and Beta of IWM are 9.03 points lower and 0.75 points higher than GLD’s Alpha and Beta.

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Performance

Annual Returns

IWM vs. GLD - Annual Returns

Year IWM GLD
2020 19.89% 23.68%
2019 25.42% 18.36%
2018 -11.02% -1.54%
2017 14.66% 11.41%
2016 21.36% 8.69%
2015 -4.33% -11.78%
2014 4.94% -0.58%
2013 38.85% -28.09%
2012 16.39% 5.26%
2011 -4.19% 11.2%
2010 26.76% 27.25%

IWM had its best year in 2013 with an annual return of 38.85%. IWM’s worst year over the past decade yielded -11.02% and occurred in 2018. In most years the iShares Russell 2000 ETF provided moderate returns such as in 2017, 2012, and 2020 where annual returns amounted to 14.66%, 16.39%, and 19.89% respectively.

The year 2010 was the strongest year for GLD, returning 27.25% on an annual basis. The poorest year for GLD in the last ten years was 2013, with a yield of -28.09%. Most years the SPDR Gold Shares has given investors modest returns, such as in 2012, 2016, and 2011, when gains were 5.26%, 8.69%, and 11.2% respectively.

Portfolio Growth

IWM vs. GLD - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWM $10,000 $36,686 13.52%
GLD $10,000 $16,395 5.81%

A $10,000 investment in IWM would have resulted in a final balance of $36,686. This is a profit of $26,686 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.52%.

With a $10,000 investment in GLD, the end total would have been $16,395. This equates to a $6,395 profit over 11 years and a compound annual growth rate (CAGR) of 5.81%.

IWM’s CAGR is 7.72 percentage points higher than that of GLD and as a result, would have yielded $20,291 more on a $10,000 investment. Thus, IWM outperformed GLD by 7.72% annually.


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