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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.

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Summary

IWNIWS
NameiShares Russell 2000 Value ETFiShares Russell Mid-Cap Value ETF
CategorySmall ValueMid-Cap Value
IssueriSharesiShares
AUM15.48B14.24B
Avg. Return10.96%12.35%
Div. Yield1.26%1.34%
Expense Ratio0.24%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

IWNIWS
Technology6.02%11.39%
Industrials14.58%14.6%
Energy5.84%4.71%
Communication Services4.17%4.08%
Utilities4.69%6.97%
Healthcare10.94%8.56%
Consumer Defensive3.77%4.76%
Real Estate14.36%11.71%
Financial Services22.97%15.75%
Consumer Cyclical8.39%12.07%
Basic Materials4.29%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 HoldingsWeight
AMC Entertainment Holdings Inc Class A1.06%
Tenet Healthcare Corp0.47%
Stag Industrial Inc0.47%
Ovintiv Inc0.45%
EMCOR Group Inc0.42%
Valley National Bancorp0.37%
Chesapeake Energy Corp Ordinary Shares – New0.37%
Agree Realty Corp0.36%
Macy’s Inc0.35%
Essent Group Ltd0.35%

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 HoldingsWeight
Twitter Inc0.69%
Marvell Technology Inc0.69%
IHS Markit Ltd0.62%
Prudential Financial Inc0.56%
Otis Worldwide Corp Ordinary Shares0.54%
International Flavors & Fragrances Inc0.53%
Xcel Energy Inc0.52%
Motorola Solutions Inc0.52%
Aptiv PLC0.52%
Aflac Inc0.52%

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

IWNIWS
Mean Return1.011.06
R-squared72.6487.04
Std. Deviation19.2816.03
Alpha-6.32-4.11
Beta1.211.1
Sharpe Ratio0.590.75
Treynor Ratio8.310.3

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

YearIWNIWS
20204.5%4.76%
201922.17%26.78%
2018-12.94%-12.36%
20177.73%13.1%
201631.64%19.69%
2015-7.53%-4.93%
20144.13%14.49%
201334.3%33.11%
201217.92%18.27%
2011-5.64%-1.55%
201024.29%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

FundInitial BalanceFinal BalanceCAGR
IWN$10,000$28,18910.96%
IWS$10,000$33,08312.35%

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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