The iShares Russell Mid-Cap ETF (IWR) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between IWR and VLUE? And which fund is better?
The expense ratio of IWR is 0.04 percentage points higher than VLUE’s (0.19% vs. 0.15%). IWR also has a lower exposure to the technology sector and a higher standard deviation. Overall, IWR has provided higher returns than VLUE over the past ten years.
In this article, we’ll compare IWR vs. VLUE. We’ll look at portfolio growth and annual returns, as well as at their holdings and industry exposure. Moreover, I’ll also discuss IWR’s and VLUE’s risk metrics, performance, and fund composition and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
|Name||iShares Russell Mid-Cap ETF||iShares MSCI USA Value Factor ETF|
|Category||Mid-Cap Blend||Large Value|
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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
IWR’s dividend yield is 0.90% lower than that of VLUE (0.99% vs. 1.89%). Also, IWR yielded on average 5.24% more per year over the past decade (14.15% vs. 8.91%). The expense ratio of IWR is 0.04 percentage points higher than VLUE’s (0.19% vs. 0.15%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
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 MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
IWR is 7.22% less exposed to the Technology sector than VLUE (19.67% vs 26.89%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 5.40% higher and 2.93% higher respectively (14.54% vs. 9.14% and 13.59% vs. 10.66%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 0.34% more of the fund’s holdings compared to VLUE (12.38% vs. 12.04%).
|IDEXX Laboratories Inc||0.51%|
|Chipotle Mexican Grill Inc||0.47%|
|Roku Inc Class A||0.44%|
|Marvell Technology Inc||0.44%|
|Trane Technologies PLC||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%.
|General Motors Co||3.19%|
|Micron Technology Inc||3.14%|
|Cisco Systems Inc||3.05%|
|International Business Machines Corp||2.76%|
|Ford Motor Co||2.23%|
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
The iShares Russell Mid-Cap ETF (IWR) has a Alpha of -2.8 with a Mean Return of 1.17 and a Treynor Ratio of 11.72. Its Sharpe Ratio is 0.86 while IWR’s Beta is 1.11. Furthermore, the fund has a R-squared of 91.52 and a Standard Deviation of 15.66.
The iShares MSCI USA Value Factor ETF (VLUE) has a Alpha of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Standard Deviation is 0 while VLUE’s Beta is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a R-squared of 0.
IWR’s Mean Return is 1.17 points higher than that of VLUE and its R-squared is 91.52 points higher. With a Standard Deviation of 15.66, IWR is slightly more volatile than VLUE. The Alpha and Beta of IWR are 2.80 points lower and 1.11 points higher than VLUE’s Alpha and Beta.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWR would have resulted in a final balance of $20,487. This is a profit of $10,487 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.15%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
IWR’s CAGR is 5.24 percentage points higher than that of VLUE and as a result, would have yielded $3,240 more on a $10,000 investment. Thus, IWR outperformed VLUE by 5.24% 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.