IWN vs. IWS: What’s The Difference?

The iShares Russell 2000 Value ETF (IWN) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. IWN is a iShares Small Value fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between IWN and IWS? And which fund is better?

The expense ratio of IWN is 0.01 percentage points higher than IWS’s (0.24% vs. 0.23%). IWN also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWN has provided lower returns than IWS over the past 11 years.

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

Summary

IWN IWS
Name iShares Russell 2000 Value ETF iShares Russell Mid-Cap Value ETF
Category Small Value Mid-Cap Value
Issuer iShares iShares
AUM 15.48B 14.24B
Avg. Return 10.96% 12.35%
Div. Yield 1.26% 1.34%
Expense Ratio 0.24% 0.23%

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 Russell Mid-Cap Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

IWN’s dividend yield is 0.08% lower than that of IWS (1.26% vs. 1.34%). Also, IWN yielded on average 1.39% less per year over the past decade (10.96% vs. 12.35%). The expense ratio of IWN is 0.01 percentage points higher than IWS’s (0.24% vs. 0.23%).

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Fund Composition

Industry Exposure

IWN vs. IWS - Industry Exposure

IWN IWS
Technology 6.02% 11.39%
Industrials 14.58% 14.6%
Energy 5.84% 4.71%
Communication Services 4.17% 4.08%
Utilities 4.69% 6.97%
Healthcare 10.94% 8.56%
Consumer Defensive 3.77% 4.76%
Real Estate 14.36% 11.71%
Financial Services 22.97% 15.75%
Consumer Cyclical 8.39% 12.07%
Basic Materials 4.29% 5.4%

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 Russell Mid-Cap Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

IWN is 7.22% more exposed to the Financial Services sector than IWS (22.97% vs 15.75%). IWN’s exposure to Industrials and Real Estate stocks is 0.02% lower and 2.65% higher respectively (14.58% vs. 14.6% and 14.36% vs. 11.71%). In total, Communication Services, Basic Materials, and Utilities also make up 3.30% less of the fund’s holdings compared to IWS (13.15% vs. 16.45%).

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%.

IWS - Holdings

IWS Holdings Weight
Twitter Inc 0.69%
Marvell Technology Inc 0.69%
IHS Markit Ltd 0.62%
Prudential Financial Inc 0.56%
Otis Worldwide Corp Ordinary Shares 0.54%
International Flavors & Fragrances Inc 0.53%
Xcel Energy Inc 0.52%
Motorola Solutions Inc 0.52%
Aptiv PLC 0.52%
Aflac Inc 0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

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Risk Analysis

IWN IWS
Mean Return 1.01 1.06
R-squared 72.64 87.04
Std. Deviation 19.28 16.03
Alpha -6.32 -4.11
Beta 1.21 1.1
Sharpe Ratio 0.59 0.75
Treynor Ratio 8.3 10.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a Mean Return of 1.06 with a Treynor Ratio of 10.3 and a Sharpe Ratio of 0.75. Its Standard Deviation is 16.03 while IWS’s Beta is 1.1. Furthermore, the fund has a R-squared of 87.04 and a Alpha of -4.11.

IWN’s Mean Return is 0.05 points lower than that of IWS and its R-squared is 14.40 points lower. With a Standard Deviation of 19.28, IWN is slightly more volatile than IWS. The Alpha and Beta of IWN are 2.21 points lower and 0.11 points higher than IWS’s Alpha and Beta.

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Performance

Annual Returns

IWN vs. IWS - Annual Returns

Year IWN IWS
2020 4.5% 4.76%
2019 22.17% 26.78%
2018 -12.94% -12.36%
2017 7.73% 13.1%
2016 31.64% 19.69%
2015 -7.53% -4.93%
2014 4.13% 14.49%
2013 34.3% 33.11%
2012 17.92% 18.27%
2011 -5.64% -1.55%
2010 24.29% 24.46%

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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

IWN vs. IWS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWN $10,000 $28,189 10.96%
IWS $10,000 $33,083 12.35%

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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

IWN’s CAGR is 1.39 percentage points lower than that of IWS and as a result, would have yielded $4,894 less on a $10,000 investment. Thus, IWN performed worse than IWS by 1.39% annually.


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