IWR vs. IWS: What’s The Difference?

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

The expense ratio of IWR is 0.04 percentage points lower than IWS’s (0.19% vs. 0.23%). IWR also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWR has provided higher returns than IWS over the past ten years.

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

Summary

IWR IWS
Name iShares Russell Mid-Cap ETF iShares Russell Mid-Cap Value ETF
Category Mid-Cap Blend Mid-Cap Value
Issuer iShares iShares
AUM 29.84B 14.24B
Avg. Return 14.15% 12.35%
Div. Yield 0.99% 1.34%
Expense Ratio 0.19% 0.23%

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 Mid-Cap Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

IWR’s dividend yield is 0.35% lower than that of IWS (0.99% vs. 1.34%). Also, IWR yielded on average 1.80% more per year over the past decade (14.15% vs. 12.35%). The expense ratio of IWR is 0.04 percentage points lower than IWS’s (0.19% vs. 0.23%).

Fund Composition

Industry Exposure

IWR vs. IWS - Industry Exposure

IWR IWS
Technology 19.67% 11.39%
Industrials 14.54% 14.6%
Energy 3.48% 4.71%
Communication Services 4.64% 4.08%
Utilities 4.46% 6.97%
Healthcare 11.76% 8.56%
Consumer Defensive 3.82% 4.76%
Real Estate 8.31% 11.71%
Financial Services 11.64% 15.75%
Consumer Cyclical 13.59% 12.07%
Basic Materials 4.1% 5.4%

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 Mid-Cap Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

IWR is 8.28% more exposed to the Technology sector than IWS (19.67% vs 11.39%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 0.06% lower and 1.52% higher respectively (14.54% vs. 14.6% and 13.59% vs. 12.07%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 4.75% less of the fund’s holdings compared to IWS (12.38% vs. 17.13%).

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%.

IWS - Holdings

IWS Holdings Weight
Twitter Inc 0.69%
Marvell Technology Inc 0.69%
IHS Markit Ltd 0.62%
Prudential Financial Inc 0.56%
Otis Worldwide Corp Ordinary Shares 0.54%
International Flavors & Fragrances Inc 0.53%
Xcel Energy Inc 0.52%
Motorola Solutions Inc 0.52%
Aptiv PLC 0.52%
Aflac Inc 0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

Risk Analysis

IWR IWS
Mean Return 1.17 1.06
R-squared 91.52 87.04
Std. Deviation 15.66 16.03
Alpha -2.8 -4.11
Beta 1.11 1.1
Sharpe Ratio 0.86 0.75
Treynor Ratio 11.72 10.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a Alpha of -4.11 with a Beta of 1.1 and a Sharpe Ratio of 0.75. Its Standard Deviation is 16.03 while IWS’s R-squared is 87.04. Furthermore, the fund has a Treynor Ratio of 10.3 and a Mean Return of 1.06.

IWR’s Mean Return is 0.11 points higher than that of IWS and its R-squared is 4.48 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than IWS. The Alpha and Beta of IWR are 1.31 points higher and 0.01 points higher than IWS’s Alpha and Beta.

Performance

Annual Returns

IWR vs. IWS - Annual Returns

Year IWR IWS
2020 16.91% 4.76%
2019 30.31% 26.78%
2018 -9.13% -12.36%
2017 18.32% 13.1%
2016 13.58% 19.69%
2015 -2.57% -4.93%
2014 13.03% 14.49%
2013 34.5% 33.11%
2012 17.13% 18.27%
2011 -1.67% -1.55%
2010 25.25% 24.46%

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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

IWR vs. IWS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $39,751 14.15%
IWS $10,000 $33,083 12.35%

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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

IWR’s CAGR is 1.80 percentage points higher than that of IWS and as a result, would have yielded $6,668 more on a $10,000 investment. Thus, IWR outperformed IWS by 1.80% annually.


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