IWR vs. VLUE: What’s The Difference?

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.

Summary

IWR VLUE
Name iShares Russell Mid-Cap ETF iShares MSCI USA Value Factor ETF
Category Mid-Cap Blend Large Value
Issuer iShares iShares
AUM 29.84B 15.95B
Avg. Return 14.15% 8.91%
Div. Yield 0.99% 1.89%
Expense Ratio 0.19% 0.15%

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%).

Fund Composition

Industry Exposure

IWR vs. VLUE - Industry Exposure

IWR VLUE
Technology 19.67% 26.89%
Industrials 14.54% 9.14%
Energy 3.48% 2.42%
Communication Services 4.64% 10.39%
Utilities 4.46% 2.68%
Healthcare 11.76% 14.31%
Consumer Defensive 3.82% 7.22%
Real Estate 8.31% 3.19%
Financial Services 11.64% 10.96%
Consumer Cyclical 13.59% 10.66%
Basic Materials 4.1% 2.14%

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%).

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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

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%.

Risk Analysis

IWR VLUE
Mean Return 1.17 0
R-squared 91.52 0
Std. Deviation 15.66 0
Alpha -2.8 0
Beta 1.11 0
Sharpe Ratio 0.86 0
Treynor Ratio 11.72 0

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.

Performance

Annual Returns

IWR vs. VLUE - Annual Returns

Year IWR VLUE
2020 16.91% -0.32%
2019 30.31% 27.47%
2018 -9.13% -11.18%
2017 18.32% 21.97%
2016 13.58% 15.68%
2015 -2.57% -3.54%
2014 13.03% 12.29%
2013 34.5% 0.0%
2012 17.13% 0.0%
2011 -1.67% 0.0%
2010 25.25% 0.0%

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.

Portfolio Growth

IWR vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $20,487 14.15%
VLUE $10,000 $17,247 8.91%

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.


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