IWR vs. IWN: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between IWR and IWN? And which fund is better?

The expense ratio of IWR is 0.05 percentage points lower than IWN’s (0.19% vs. 0.24%). IWR also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWR has provided higher returns than IWN over the past ten years.

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

Summary

IWR IWN
Name iShares Russell Mid-Cap ETF iShares Russell 2000 Value ETF
Category Mid-Cap Blend Small Value
Issuer iShares iShares
AUM 29.84B 15.48B
Avg. Return 14.15% 10.96%
Div. Yield 0.99% 1.26%
Expense Ratio 0.19% 0.24%

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 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%.

IWR’s dividend yield is 0.27% lower than that of IWN (0.99% vs. 1.26%). Also, IWR yielded on average 3.19% more per year over the past decade (14.15% vs. 10.96%). The expense ratio of IWR is 0.05 percentage points lower than IWN’s (0.19% vs. 0.24%).

Fund Composition

Industry Exposure

IWR vs. IWN - Industry Exposure

IWR IWN
Technology 19.67% 6.02%
Industrials 14.54% 14.58%
Energy 3.48% 5.84%
Communication Services 4.64% 4.17%
Utilities 4.46% 4.69%
Healthcare 11.76% 10.94%
Consumer Defensive 3.82% 3.77%
Real Estate 8.31% 14.36%
Financial Services 11.64% 22.97%
Consumer Cyclical 13.59% 8.39%
Basic Materials 4.1% 4.29%

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 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%.

IWR is 13.65% more exposed to the Technology sector than IWN (19.67% vs 6.02%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 0.04% lower and 5.20% higher respectively (14.54% vs. 14.58% and 13.59% vs. 8.39%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 0.37% less of the fund’s holdings compared to IWN (12.38% vs. 12.75%).

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%.

IWN - Holdings

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

IWR IWN
Mean Return 1.17 1.01
R-squared 91.52 72.64
Std. Deviation 15.66 19.28
Alpha -2.8 -6.32
Beta 1.11 1.21
Sharpe Ratio 0.86 0.59
Treynor Ratio 11.72 8.3

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

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 Beta of 1.21 and a Treynor Ratio of 8.3.

IWR’s Mean Return is 0.16 points higher than that of IWN and its R-squared is 18.88 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than IWN. The Alpha and Beta of IWR are 3.52 points higher and 0.10 points lower than IWN’s Alpha and Beta.

Performance

Annual Returns

IWR vs. IWN - Annual Returns

Year IWR IWN
2020 16.91% 4.5%
2019 30.31% 22.17%
2018 -9.13% -12.94%
2017 18.32% 7.73%
2016 13.58% 31.64%
2015 -2.57% -7.53%
2014 13.03% 4.13%
2013 34.5% 34.3%
2012 17.13% 17.92%
2011 -1.67% -5.64%
2010 25.25% 24.29%

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 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

IWR vs. IWN - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $39,751 14.15%
IWN $10,000 $28,189 10.96%

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 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%.

IWR’s CAGR is 3.19 percentage points higher than that of IWN and as a result, would have yielded $11,562 more on a $10,000 investment. Thus, IWR outperformed IWN by 3.19% annually.


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