The iShares Russell Mid-Cap Growth ETF (IWP) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. IWP is a iShares Mid-Cap Growth fund and IWN is a iShares Small Value fund. So, what’s the difference between IWP and IWN? And which fund is better?
IWP and IWN have the same expense ratio: 0.24%. IWP also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWP has provided higher returns than IWN over the past 11 years.
In this article, we’ll compare IWP vs. IWN. We’ll look at risk metrics and holdings, as well as at their performance and fund composition. Moreover, I’ll also discuss IWP’s and IWN’s industry exposure, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| IWP | IWN | |
| Name | iShares Russell Mid-Cap Growth ETF | iShares Russell 2000 Value ETF |
| Category | Mid-Cap Growth | Small Value |
| Issuer | iShares | iShares |
| AUM | 15.7B | 15.48B |
| Avg. Return | 16.75% | 10.96% |
| Div. Yield | 0.26% | 1.26% |
| Expense Ratio | 0.24% | 0.24% |
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 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%.
IWP’s dividend yield is 1.00% lower than that of IWN (0.26% vs. 1.26%). Also, IWP yielded on average 5.79% more per year over the past decade (16.75% vs. 10.96%). IWP and IWN have the same expense ratio: 0.24%.
Fund Composition
Industry Exposure
| IWP | IWN | |
| Technology | 33.88% | 6.02% |
| Industrials | 14.09% | 14.58% |
| Energy | 1.51% | 5.84% |
| Communication Services | 6.32% | 4.17% |
| Utilities | 0.16% | 4.69% |
| Healthcare | 16.79% | 10.94% |
| Consumer Defensive | 2.32% | 3.77% |
| Real Estate | 2.46% | 14.36% |
| Financial Services | 4.52% | 22.97% |
| Consumer Cyclical | 16.09% | 8.39% |
| Basic Materials | 1.86% | 4.29% |
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 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%.
IWP is 27.86% more exposed to the Technology sector than IWN (33.88% vs 6.02%). IWP’s exposure to Healthcare and Consumer Cyclical stocks is 5.85% higher and 7.70% higher respectively (16.79% vs. 10.94% and 16.09% vs. 8.39%). In total, Energy, Basic Materials, and Consumer Defensive also make up 8.21% less of the fund’s holdings compared to IWN (5.69% vs. 13.90%).
Holdings
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
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%.
| 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%.
Risk Analysis
| IWP | IWN | |
| Mean Return | 1.27 | 1.01 |
| R-squared | 87.01 | 72.64 |
| Std. Deviation | 16.05 | 19.28 |
| Alpha | -1.03 | -6.32 |
| Beta | 1.1 | 1.21 |
| Sharpe Ratio | 0.91 | 0.59 |
| Treynor Ratio | 12.98 | 8.3 |
The iShares Russell Mid-Cap Growth ETF (IWP) has a Sharpe Ratio of 0.91 with a Standard Deviation of 16.05 and a Treynor Ratio of 12.98. Its Alpha is -1.03 while IWP’s Beta is 1.1. Furthermore, the fund has a R-squared of 87.01 and a Mean Return of 1.27.
The iShares Russell 2000 Value ETF (IWN) has a Treynor Ratio of 8.3 with a R-squared of 72.64 and a Beta of 1.21. Its Alpha is -6.32 while IWN’s Sharpe Ratio is 0.59. Furthermore, the fund has a Standard Deviation of 19.28 and a Mean Return of 1.01.
IWP’s Mean Return is 0.26 points higher than that of IWN and its R-squared is 14.37 points higher. With a Standard Deviation of 16.05, IWP is slightly less volatile than IWN. The Alpha and Beta of IWP are 5.29 points higher and 0.11 points lower than IWN’s Alpha and Beta.
Performance
Annual Returns
| Year | IWP | IWN |
| 2020 | 35.29% | 4.5% |
| 2019 | 35.14% | 22.17% |
| 2018 | -4.95% | -12.94% |
| 2017 | 24.98% | 7.73% |
| 2016 | 7.15% | 31.64% |
| 2015 | -0.39% | -7.53% |
| 2014 | 11.68% | 4.13% |
| 2013 | 35.44% | 34.3% |
| 2012 | 15.62% | 17.92% |
| 2011 | -1.82% | -5.64% |
| 2010 | 26.1% | 24.29% |
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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWP | $10,000 | $50,191 | 16.75% |
| IWN | $10,000 | $28,189 | 10.96% |
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 IWN, the end total would have been $28,189. This equates to a $18,189 profit over 11 years and a compound annual growth rate (CAGR) of 10.96%.
IWP’s CAGR is 5.79 percentage points higher than that of IWN and as a result, would have yielded $22,002 more on a $10,000 investment. Thus, IWP outperformed IWN by 5.79% annually.
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