The iShares Russell 2000 ETF (IWM) and the iShares S&P 500 Growth ETF (IVW) are both among the Top 100 ETFs. IWM is a iShares Small Blend fund and IVW is a iShares Large Growth fund. So, what’s the difference between IWM and IVW? And which fund is better?
The expense ratio of IWM is 0.01 percentage points higher than IVW’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 lower returns than IVW over the past ten years.
In this article, we’ll compare IWM vs. IVW. We’ll look at portfolio growth and annual returns, as well as at their holdings and fund composition. Moreover, I’ll also discuss IWM’s and IVW’s performance, risk metrics, and industry exposure and examine how these affect their overall returns.
Summary
| IWM | IVW | |
| Name | iShares Russell 2000 ETF | iShares S&P 500 Growth ETF |
| Category | Small Blend | Large Growth |
| Issuer | iShares | iShares |
| AUM | 66.48B | 35.72B |
| Avg. Return | 13.52% | 16.74% |
| Div. Yield | 0.86% | 0.61% |
| 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 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.
IWM’s dividend yield is 0.25% higher than that of IVW (0.86% vs. 0.61%). Also, IWM yielded on average 3.21% less per year over the past decade (13.52% vs. 16.74%). The expense ratio of IWM is 0.01 percentage points higher than IVW’s (0.19% vs. 0.18%).
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Fund Composition
Industry Exposure
| IWM | IVW | |
| Technology | 14.21% | 37.8% |
| Industrials | 14.78% | 5.72% |
| Energy | 3.74% | 0.06% |
| Communication Services | 3.79% | 15.44% |
| Utilities | 2.44% | 0.47% |
| Healthcare | 20.3% | 11.88% |
| Consumer Defensive | 3.65% | 3.84% |
| Real Estate | 8.59% | 1.11% |
| Financial Services | 13.76% | 6.78% |
| Consumer Cyclical | 10.99% | 15.25% |
| Basic Materials | 3.74% | 1.65% |
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 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.
IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.
IWM is 8.42% more exposed to the Healthcare sector than IVW (20.3% vs 11.88%). IWM’s exposure to Industrials and Technology stocks is 9.06% higher and 23.59% lower respectively (14.78% vs. 5.72% and 14.21% vs. 37.8%). In total, Consumer Defensive, Basic Materials, and Energy also make up 5.58% more of the fund’s holdings compared to IVW (11.13% vs. 5.55%).
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%.
| IVW Holdings | Weight |
| Apple Inc | 11.46% |
| Microsoft Corp | 10.75% |
| Amazon.com Inc | 7.14% |
| Facebook Inc Class A | 4.28% |
| Alphabet Inc Class A | 4.06% |
| Alphabet Inc Class C | 3.86% |
| Tesla Inc | 2.65% |
| NVIDIA Corp | 2.43% |
| PayPal Holdings Inc | 1.62% |
| Adobe Inc | 1.49% |
IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.
Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.
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Risk Analysis
| IWM | IVW | |
| Mean Return | 1.12 | 1.44 |
| R-squared | 77.73 | 93.82 |
| Std. Deviation | 18.87 | 13.77 |
| Alpha | -5.12 | 2.19 |
| Beta | 1.23 | 0.98 |
| Sharpe Ratio | 0.68 | 1.21 |
| Treynor Ratio | 9.56 | 17.24 |
The iShares Russell 2000 ETF (IWM) has a Mean Return of 1.12 with a Alpha of -5.12 and a Sharpe Ratio of 0.68. Its Treynor Ratio is 9.56 while IWM’s Beta is 1.23. Furthermore, the fund has a Standard Deviation of 18.87 and a R-squared of 77.73.
The iShares S&P 500 Growth ETF (IVW) has a Beta of 0.98 with a Alpha of 2.19 and a R-squared of 93.82. Its Sharpe Ratio is 1.21 while IVW’s Mean Return is 1.44. Furthermore, the fund has a Treynor Ratio of 17.24 and a Standard Deviation of 13.77.
IWM’s Mean Return is 0.32 points lower than that of IVW and its R-squared is 16.09 points lower. With a Standard Deviation of 18.87, IWM is slightly more volatile than IVW. The Alpha and Beta of IWM are 7.31 points lower and 0.25 points higher than IVW’s Alpha and Beta.
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Performance
Annual Returns
| Year | IWM | IVW |
| 2020 | 19.89% | 33.21% |
| 2019 | 25.42% | 30.91% |
| 2018 | -11.02% | -0.17% |
| 2017 | 14.66% | 27.2% |
| 2016 | 21.36% | 6.74% |
| 2015 | -4.33% | 5.33% |
| 2014 | 4.94% | 14.67% |
| 2013 | 38.85% | 32.48% |
| 2012 | 16.39% | 14.39% |
| 2011 | -4.19% | 4.49% |
| 2010 | 26.76% | 14.84% |
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 2020 was the strongest year for IVW, returning 33.21% on an annual basis. The poorest year for IVW in the last ten years was 2018, with a yield of -0.17%. Most years the iShares S&P 500 Growth ETF has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 14.39%, 14.67%, and 14.84% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWM | $10,000 | $36,686 | 13.52% |
| IVW | $10,000 | $51,915 | 16.74% |
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 IVW, the end total would have been $51,915. This equates to a $41,915 profit over 11 years and a compound annual growth rate (CAGR) of 16.74%.
IWM’s CAGR is 3.21 percentage points lower than that of IVW and as a result, would have yielded $15,229 less on a $10,000 investment. Thus, IWM performed worse than IVW by 3.21% annually.
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