The iShares Russell 2000 ETF (IWM) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. IWM is a iShares Small Blend fund and IVE is a iShares Large Value fund. So, what’s the difference between IWM and IVE? And which fund is better?
The expense ratio of IWM is 0.01 percentage points higher than IVE’s (0.19% vs. 0.18%). IWM also has a higher exposure to the healthcare sector and a higher standard deviation. Overall, IWM has provided higher returns than IVE over the past ten years.
In this article, we’ll compare IWM vs. IVE. We’ll look at fund composition and holdings, as well as at their performance and portfolio growth. Moreover, I’ll also discuss IWM’s and IVE’s annual returns, industry exposure, and risk metrics and examine how these affect their overall returns.
Summary
| IWM | IVE | |
| Name | iShares Russell 2000 ETF | iShares S&P 500 Value ETF |
| Category | Small Blend | Large Value |
| Issuer | iShares | iShares |
| AUM | 66.48B | 22.4B |
| Avg. Return | 13.52% | 11.68% |
| Div. Yield | 0.86% | 1.88% |
| Expense Ratio | 0.19% | 0.18% |
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 iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
IWM’s dividend yield is 1.02% lower than that of IVE (0.86% vs. 1.88%). Also, IWM yielded on average 1.84% more per year over the past decade (13.52% vs. 11.68%). The expense ratio of IWM is 0.01 percentage points higher than IVE’s (0.19% vs. 0.18%).
Fund Composition
Industry Exposure
| IWM | IVE | |
| Technology | 14.21% | 9.41% |
| Industrials | 14.78% | 12.19% |
| Energy | 3.74% | 5.43% |
| Communication Services | 3.79% | 6.4% |
| Utilities | 2.44% | 4.82% |
| Healthcare | 20.3% | 15.4% |
| Consumer Defensive | 3.65% | 9.23% |
| Real Estate | 8.59% | 4.38% |
| Financial Services | 13.76% | 22.06% |
| Consumer Cyclical | 10.99% | 7.68% |
| Basic Materials | 3.74% | 2.99% |
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 iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
IWM is 4.90% more exposed to the Healthcare sector than IVE (20.3% vs 15.4%). IWM’s exposure to Industrials and Technology stocks is 2.59% higher and 4.80% higher respectively (14.78% vs. 12.19% and 14.21% vs. 9.41%). In total, Consumer Defensive, Basic Materials, and Energy also make up 6.52% less of the fund’s holdings compared to IVE (11.13% vs. 17.65%).
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%.
| IVE Holdings | Weight |
| Berkshire Hathaway Inc Class B | 3.05% |
| JPMorgan Chase & Co | 2.65% |
| The Walt Disney Co | 1.85% |
| Bank of America Corp | 1.67% |
| Johnson & Johnson | 1.57% |
| Exxon Mobil Corp | 1.41% |
| Pfizer Inc | 1.38% |
| Cisco Systems Inc | 1.35% |
| Verizon Communications Inc | 1.33% |
| Intel Corp | 1.25% |
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
Risk Analysis
| IWM | IVE | |
| Mean Return | 1.12 | 1.05 |
| R-squared | 77.73 | 92.08 |
| Std. Deviation | 18.87 | 14.3 |
| Alpha | -5.12 | -2.9 |
| Beta | 1.23 | 1.01 |
| Sharpe Ratio | 0.68 | 0.83 |
| Treynor Ratio | 9.56 | 11.41 |
The iShares Russell 2000 ETF (IWM) has a R-squared of 77.73 with a Sharpe Ratio of 0.68 and a Alpha of -5.12. Its Standard Deviation is 18.87 while IWM’s Mean Return is 1.12. Furthermore, the fund has a Beta of 1.23 and a Treynor Ratio of 9.56.
The iShares S&P 500 Value ETF (IVE) has a Beta of 1.01 with a R-squared of 92.08 and a Alpha of -2.9. Its Standard Deviation is 14.3 while IVE’s Sharpe Ratio is 0.83. Furthermore, the fund has a Mean Return of 1.05 and a Treynor Ratio of 11.41.
IWM’s Mean Return is 0.07 points higher than that of IVE and its R-squared is 14.35 points lower. With a Standard Deviation of 18.87, IWM is slightly more volatile than IVE. The Alpha and Beta of IWM are 2.22 points lower and 0.22 points higher than IVE’s Alpha and Beta.
Performance
Annual Returns
| Year | IWM | IVE |
| 2020 | 19.89% | 1.24% |
| 2019 | 25.42% | 31.71% |
| 2018 | -11.02% | -9.09% |
| 2017 | 14.66% | 15.19% |
| 2016 | 21.36% | 17.17% |
| 2015 | -4.33% | -3.24% |
| 2014 | 4.94% | 12.14% |
| 2013 | 38.85% | 31.69% |
| 2012 | 16.39% | 17.45% |
| 2011 | -4.19% | -0.63% |
| 2010 | 26.76% | 14.9% |
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 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWM | $10,000 | $36,686 | 13.52% |
| IVE | $10,000 | $31,350 | 11.68% |
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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.
IWM’s CAGR is 1.84 percentage points higher than that of IVE and as a result, would have yielded $5,336 more on a $10,000 investment. Thus, IWM outperformed IVE by 1.84% annually.
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