IWR vs. IAU: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the iShares Gold Trust (IAU) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and IAU is a iShares N/A fund. So, what’s the difference between IWR and IAU? And which fund is better?

The expense ratio of IWR is 0.06 percentage points lower than IAU’s (0.19% vs. 0.25%). IWR also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWR has provided higher returns than IAU over the past ten years.

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

Summary

IWR IAU
Name iShares Russell Mid-Cap ETF iShares Gold Trust
Category Mid-Cap Blend N/A
Issuer iShares iShares
AUM 29.84B 28.61B
Avg. Return 14.15% 6.03%
Div. Yield 0.99% 0.0%
Expense Ratio 0.19% 0.25%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

IWR’s dividend yield is 0.99% higher than that of IAU (0.99% vs. 0.0%). Also, IWR yielded on average 8.12% more per year over the past decade (14.15% vs. 6.03%). The expense ratio of IWR is 0.06 percentage points lower than IAU’s (0.19% vs. 0.25%).

Fund Composition

Industry Exposure

IWR vs. IAU - Industry Exposure

IWR IAU
Technology 19.67% 0.0%
Industrials 14.54% 0.0%
Energy 3.48% 0.0%
Communication Services 4.64% 0.0%
Utilities 4.46% 0.0%
Healthcare 11.76% 0.0%
Consumer Defensive 3.82% 0.0%
Real Estate 8.31% 0.0%
Financial Services 11.64% 0.0%
Consumer Cyclical 13.59% 0.0%
Basic Materials 4.1% 0.0%

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

IWR is 19.67% more exposed to the Technology sector than IAU (19.67% vs 0.0%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 14.54% higher and 13.59% higher respectively (14.54% vs. 0.0% and 13.59% vs. 0.0%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 12.38% more of the fund’s holdings compared to IAU (12.38% vs. 0.00%).

Holdings

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

Risk Analysis

IWR IAU
Mean Return 1.17 0.23
R-squared 91.52 16.03
Std. Deviation 15.66 16.97
Alpha -2.8 4.16
Beta 1.11 0.48
Sharpe Ratio 0.86 0.13
Treynor Ratio 11.72 1.5

The iShares Russell Mid-Cap ETF (IWR) has a Mean Return of 1.17 with a Standard Deviation of 15.66 and a R-squared of 91.52. Its Treynor Ratio is 11.72 while IWR’s Alpha is -2.8. Furthermore, the fund has a Sharpe Ratio of 0.86 and a Beta of 1.11.

The iShares Gold Trust (IAU) has a Treynor Ratio of 1.5 with a Standard Deviation of 16.97 and a Beta of 0.48. Its R-squared is 16.03 while IAU’s Mean Return is 0.23. Furthermore, the fund has a Alpha of 4.16 and a Sharpe Ratio of 0.13.

IWR’s Mean Return is 0.94 points higher than that of IAU and its R-squared is 75.49 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than IAU. The Alpha and Beta of IWR are 6.96 points lower and 0.63 points higher than IAU’s Alpha and Beta.

Performance

Annual Returns

IWR vs. IAU - Annual Returns

Year IWR IAU
2020 16.91% 23.86%
2019 30.31% 18.54%
2018 -9.13% -1.39%
2017 18.32% 11.58%
2016 13.58% 8.85%
2015 -2.57% -11.65%
2014 13.03% -0.44%
2013 34.5% -27.96%
2012 17.13% 8.37%
2011 -1.67% 8.66%
2010 25.25% 27.93%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% respectively.

The year 2010 was the strongest year for IAU, returning 27.93% on an annual basis. The poorest year for IAU in the last ten years was 2013, with a yield of -27.96%. Most years the iShares Gold Trust has given investors modest returns, such as in 2012, 2011, and 2016, when gains were 8.37%, 8.66%, and 8.85% respectively.

Portfolio Growth

IWR vs. IAU - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $39,751 14.15%
IAU $10,000 $16,786 6.03%

A $10,000 investment in IWR would have resulted in a final balance of $39,751. This is a profit of $29,751 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

With a $10,000 investment in IAU, the end total would have been $16,786. This equates to a $6,786 profit over 11 years and a compound annual growth rate (CAGR) of 6.03%.

IWR’s CAGR is 8.12 percentage points higher than that of IAU and as a result, would have yielded $22,965 more on a $10,000 investment. Thus, IWR outperformed IAU by 8.12% annually.


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