The iShares Russell Mid-Cap Growth ETF (IWP) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. IWP is a iShares Mid-Cap Growth fund and IEF is a iShares Long Government fund. So, what’s the difference between IWP and IEF? And which fund is better?
The expense ratio of IWP is 0.09 percentage points higher than IEF’s (0.24% vs. 0.15%). IWP also has a high exposure to the technology sector while IEF is mostly comprised of AAA bonds. Overall, IWP has provided higher returns than IEF over the past 11 years.
In this article, we’ll compare IWP vs. IEF. We’ll look at fund composition and holdings, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss IWP’s and IEF’s industry exposure, risk metrics, and performance and examine how these affect their overall returns.
|Name||iShares Russell Mid-Cap Growth ETF||iShares 7-10 Year Treasury Bond ETF|
|Category||Mid-Cap Growth||Long Government|
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 iShares 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.
IWP’s dividend yield is 0.58% lower than that of IEF (0.26% vs. 0.84%). Also, IWP yielded on average 11.69% more per year over the past decade (16.75% vs. 5.06%). The expense ratio of IWP is 0.09 percentage points higher than IEF’s (0.24% vs. 0.15%).
|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%.
|IEF Bond Sectors||Weight|
IEF’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Standard Deviation of 16.05 with a Sharpe Ratio of 0.91 and a Beta of 1.1. Its Alpha is -1.03 while IWP’s R-squared is 87.01. Furthermore, the fund has a Mean Return of 1.27 and a Treynor Ratio of 12.98.
The iShares 7-10 Year Treasury Bond ETF (IEF) has a Sharpe Ratio of 0.6 with a Mean Return of 0.32 and a Standard Deviation of 5.42. Its Beta is 1.59 while IEF’s R-squared is 77.56. Furthermore, the fund has a Alpha of -1.2 and a Treynor Ratio of 1.97.
IWP’s Mean Return is 0.95 points higher than that of IEF and its R-squared is 9.45 points higher. With a Standard Deviation of 16.05, IWP is slightly more volatile than IEF. The Alpha and Beta of IWP are 0.17 points higher and 0.49 points lower than IEF’s Alpha and Beta.
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 2011 was the strongest year for IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% 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 IEF, the end total would have been $16,936. This equates to a $6,936 profit over 11 years and a compound annual growth rate (CAGR) of 5.06%.
IWP’s CAGR is 11.69 percentage points higher than that of IEF and as a result, would have yielded $33,255 more on a $10,000 investment. Thus, IWP outperformed IEF by 11.69% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.