IWN vs. EFV: What’s The Difference?

The iShares Russell 2000 Value ETF (IWN) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. IWN is a iShares Small Value fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between IWN and EFV? And which fund is better?

The expense ratio of IWN is 0.15 percentage points lower than EFV’s (0.24% vs. 0.39%). IWN also has a lower exposure to the financial services sector and a higher standard deviation. Overall, IWN has provided higher returns than EFV over the past 11 years.

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

Summary

IWN EFV
Name iShares Russell 2000 Value ETF iShares MSCI EAFE Value ETF
Category Small Value Foreign Large Value
Issuer iShares iShares
AUM 15.48B 14.37B
Avg. Return 10.96% 3.99%
Div. Yield 1.26% 2.94%
Expense Ratio 0.24% 0.39%

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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

IWN’s dividend yield is 1.68% lower than that of EFV (1.26% vs. 2.94%). Also, IWN yielded on average 6.97% more per year over the past decade (10.96% vs. 3.99%). The expense ratio of IWN is 0.15 percentage points lower than EFV’s (0.24% vs. 0.39%).

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Fund Composition

Industry Exposure

IWN vs. EFV - Industry Exposure

IWN EFV
Technology 6.02% 2.98%
Industrials 14.58% 11.6%
Energy 5.84% 6.6%
Communication Services 4.17% 6.46%
Utilities 4.69% 6.14%
Healthcare 10.94% 9.19%
Consumer Defensive 3.77% 6.82%
Real Estate 14.36% 5.06%
Financial Services 22.97% 26.55%
Consumer Cyclical 8.39% 9.0%
Basic Materials 4.29% 9.59%

The iShares Russell 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.

IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.

The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

IWN is 3.58% less exposed to the Financial Services sector than EFV (22.97% vs 26.55%). IWN’s exposure to Industrials and Real Estate stocks is 2.98% higher and 9.30% higher respectively (14.58% vs. 11.6% and 14.36% vs. 5.06%). In total, Communication Services, Basic Materials, and Utilities also make up 9.04% less of the fund’s holdings compared to EFV (13.15% vs. 22.19%).

Holdings

IWN - Holdings

IWN Holdings Weight
AMC Entertainment Holdings Inc Class A 1.06%
Tenet Healthcare Corp 0.47%
Stag Industrial Inc 0.47%
Ovintiv Inc 0.45%
EMCOR Group Inc 0.42%
Valley National Bancorp 0.37%
Chesapeake Energy Corp Ordinary Shares – New 0.37%
Agree Realty Corp 0.36%
Macy’s Inc 0.35%
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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

IWN EFV
Mean Return 1.01 0.42
R-squared 72.64 92.15
Std. Deviation 19.28 16.53
Alpha -6.32 -1.77
Beta 1.21 1.05
Sharpe Ratio 0.59 0.26
Treynor Ratio 8.3 2.92

The iShares Russell 2000 Value ETF (IWN) has a Standard Deviation of 19.28 with a Alpha of -6.32 and a Sharpe Ratio of 0.59. Its Treynor Ratio is 8.3 while IWN’s Mean Return is 1.01. Furthermore, the fund has a R-squared of 72.64 and a Beta of 1.21.

The iShares MSCI EAFE Value ETF (EFV) has a R-squared of 92.15 with a Sharpe Ratio of 0.26 and a Standard Deviation of 16.53. Its Alpha is -1.77 while EFV’s Beta is 1.05. Furthermore, the fund has a Mean Return of 0.42 and a Treynor Ratio of 2.92.

IWN’s Mean Return is 0.59 points higher than that of EFV and its R-squared is 19.51 points lower. With a Standard Deviation of 19.28, IWN is slightly more volatile than EFV. The Alpha and Beta of IWN are 4.55 points lower and 0.16 points higher than EFV’s Alpha and Beta.

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Performance

Annual Returns

IWN vs. EFV - Annual Returns

Year IWN EFV
2020 4.5% -2.78%
2019 22.17% 15.97%
2018 -12.94% -14.88%
2017 7.73% 21.22%
2016 31.64% 4.87%
2015 -7.53% -5.89%
2014 4.13% -5.65%
2013 34.3% 22.61%
2012 17.92% 17.52%
2011 -5.64% -12.24%
2010 24.29% 3.18%

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 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

IWN vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWN $10,000 $28,189 10.96%
EFV $10,000 $14,134 3.99%

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 EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

IWN’s CAGR is 6.97 percentage points higher than that of EFV and as a result, would have yielded $14,055 more on a $10,000 investment. Thus, IWN outperformed EFV by 6.97% annually.


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