The iShares Russell 2000 Value ETF (IWN) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. IWN is a iShares Small Value fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IWN and BIV? And which fund is better?
The expense ratio of IWN is 0.19 percentage points higher than BIV’s (0.24% vs. 0.05%). IWN also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, IWN has provided higher returns than BIV over the past 11 years.
In this article, we’ll compare IWN vs. BIV. We’ll look at annual returns and performance, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss IWN’s and BIV’s fund composition, holdings, and industry exposure and examine how these affect their overall returns.
|Name||iShares Russell 2000 Value ETF||Vanguard Intermediate-Term Bond Index Fund ETF Shares|
|Category||Small Value||Intermediate-Term Bond|
The iShares Russell 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
IWN’s dividend yield is 0.80% lower than that of BIV (1.26% vs. 2.06%). Also, IWN yielded on average 5.65% more per year over the past decade (10.96% vs. 5.31%). The expense ratio of IWN is 0.19 percentage points higher than BIV’s (0.24% vs. 0.05%).
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|AMC Entertainment Holdings Inc Class A||1.06%|
|Tenet Healthcare Corp||0.47%|
|Stag Industrial Inc||0.47%|
|EMCOR Group Inc||0.42%|
|Valley National Bancorp||0.37%|
|Chesapeake Energy Corp Ordinary Shares – New||0.37%|
|Agree Realty Corp||0.36%|
|Essent Group Ltd||0.35%|
IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.
Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.
|BIV Bond Sectors||Weight|
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
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The iShares Russell 2000 Value ETF (IWN) has a Mean Return of 1.01 with a Beta of 1.21 and a Treynor Ratio of 8.3. Its Standard Deviation is 19.28 while IWN’s Alpha is -6.32. Furthermore, the fund has a R-squared of 72.64 and a Sharpe Ratio of 0.59.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Standard Deviation of 4.09 with a Treynor Ratio of 2.72 and a Sharpe Ratio of 0.89. Its Alpha is -0.07 while BIV’s R-squared is 95.12. Furthermore, the fund has a Beta of 1.33 and a Mean Return of 0.35.
IWN’s Mean Return is 0.66 points higher than that of BIV and its R-squared is 22.48 points lower. With a Standard Deviation of 19.28, IWN is slightly more volatile than BIV. The Alpha and Beta of IWN are 6.25 points lower and 0.12 points lower than BIV’s Alpha and Beta.
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IWN had its best year in 2013 with an annual return of 34.3%. IWN’s worst year over the past decade yielded -12.94% and occurred in 2018. In most years the iShares Russell 2000 Value ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 4.5%, 7.73%, and 17.92% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWN would have resulted in a final balance of $28,189. This is a profit of $18,189 over 11 years and amounts to a compound annual growth rate (CAGR) of 10.96%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
IWN’s CAGR is 5.65 percentage points higher than that of BIV and as a result, would have yielded $10,697 more on a $10,000 investment. Thus, IWN outperformed BIV by 5.65% annually.
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