The iShares Russell Mid-Cap Growth ETF (IWP) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. IWP is a iShares Mid-Cap Growth fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between IWP and DFAC? And which fund is better?
The expense ratio of IWP is 0.05 percentage points higher than DFAC’s (0.24% vs. 0.19%). IWP also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWP has provided higher returns than DFAC over the past 11 years.
In this article, we’ll compare IWP vs. DFAC. We’ll look at holdings and performance, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss IWP’s and DFAC’s portfolio growth, industry exposure, and annual returns and examine how these affect their overall returns.
|Name||iShares Russell Mid-Cap Growth ETF||Dimensional U.S. Core Equity 2 ETF|
|Category||Mid-Cap Growth||Large Blend|
|Issuer||iShares||Dimensional Fund Advisors|
The iShares Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
IWP’s dividend yield is 0.74% lower than that of DFAC (0.26% vs. 1.0%). Also, IWP yielded on average 2.82% more per year over the past decade (16.75% vs. 13.93%). The expense ratio of IWP is 0.05 percentage points higher than DFAC’s (0.24% vs. 0.19%).
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The iShares Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
IWP is 11.07% more exposed to the Technology sector than DFAC (33.88% vs 22.81%). IWP’s exposure to Healthcare and Consumer Cyclical stocks is 4.70% higher and 3.00% higher respectively (16.79% vs. 12.09% and 16.09% vs. 13.09%). In total, Energy, Basic Materials, and Consumer Defensive also make up 6.48% less of the fund’s holdings compared to DFAC (5.69% vs. 12.17%).
|IDEXX Laboratories Inc||1.3%|
|Roku Inc Class A||1.29%|
|Match Group Inc||1.06%|
|Chipotle Mexican Grill Inc||1.06%|
|Veeva Systems Inc Class A||1.04%|
|Palantir Technologies Inc Ordinary Shares – Class A||1.04%|
|Lululemon Athletica Inc||1.01%|
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
|Johnson & Johnson||1.05%|
|Facebook Inc Class A||1.05%|
|JPMorgan Chase & Co||1.0%|
|Alphabet Inc Class C||0.85%|
|Alphabet Inc Class A||0.84%|
|Berkshire Hathaway Inc Class B||0.75%|
|Visa Inc Class A||0.74%|
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
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The iShares Russell Mid-Cap Growth ETF (IWP) has a Sharpe Ratio of 0.91 with a Standard Deviation of 16.05 and a Alpha of -1.03. Its Beta is 1.1 while IWP’s Treynor Ratio is 12.98. Furthermore, the fund has a Mean Return of 1.27 and a R-squared of 87.01.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Treynor Ratio of 11.85 with a Alpha of -2.75 and a Beta of 1.12. Its Standard Deviation is 15.55 while DFAC’s Mean Return is 1.19. Furthermore, the fund has a R-squared of 95.1 and a Sharpe Ratio of 0.88.
IWP’s Mean Return is 0.08 points higher than that of DFAC and its R-squared is 8.09 points lower. With a Standard Deviation of 16.05, IWP is slightly more volatile than DFAC. The Alpha and Beta of IWP are 1.72 points higher and 0.02 points lower than DFAC’s Alpha and Beta.
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IWP had its best year in 2013 with an annual return of 35.44%. IWP’s worst year over the past decade yielded -4.95% and occurred in 2018. In most years the iShares Russell Mid-Cap Growth ETF provided moderate returns such as in 2014, 2012, and 2017 where annual returns amounted to 11.68%, 15.62%, and 24.98% respectively.
The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWP would have resulted in a final balance of $50,191. This is a profit of $40,191 over 11 years and amounts to a compound annual growth rate (CAGR) of 16.75%.
With a $10,000 investment in DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.
IWP’s CAGR is 2.82 percentage points higher than that of DFAC and as a result, would have yielded $11,395 more on a $10,000 investment. Thus, IWP outperformed DFAC by 2.82% annually.
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