The iShares 1-3 Year Treasury Bond ETF (SHY) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. SHY is a iShares Short Government fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between SHY and IWP? And which fund is better?
The expense ratio of SHY is 0.09 percentage points lower than IWP’s (0.15% vs. 0.24%). SHY is mostly comprised of AAA bonds while IWP has a high exposure to the technology sector. Overall, SHY has provided lower returns than IWP over the past 11 years.
In this article, we’ll compare SHY vs. IWP. We’ll look at industry exposure and performance, as well as at their holdings and fund composition. Moreover, I’ll also discuss SHY’s and IWP’s risk metrics, annual returns, and portfolio growth and examine how these affect their overall returns.
Summary
| SHY | IWP | |
| Name | iShares 1-3 Year Treasury Bond ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Short Government | Mid-Cap Growth |
| Issuer | iShares | iShares |
| AUM | 19.51B | 15.7B |
| Avg. Return | 1.27% | 16.75% |
| Div. Yield | 0.46% | 0.26% |
| Expense Ratio | 0.15% | 0.24% |
The iShares 1-3 Year Treasury Bond ETF (SHY) is a Short Government fund that is issued by iShares. It currently has 19.51B total assets under management and has yielded an average annual return of 1.27% over the past 10 years. The fund has a dividend yield of 0.46% with an expense ratio of 0.15%.
The iShares Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
SHY’s dividend yield is 0.20% higher than that of IWP (0.46% vs. 0.26%). Also, SHY yielded on average 15.48% less per year over the past decade (1.27% vs. 16.75%). The expense ratio of SHY is 0.09 percentage points lower than IWP’s (0.15% vs. 0.24%).
Fund Composition
Holdings
| SHY Bond Sectors | Weight |
| AAA | 99.67% |
| Others | 0.33% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
SHY’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.67%, 0.33%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| SHY | IWP | |
| Mean Return | 0.09 | 1.27 |
| R-squared | 39.11 | 87.01 |
| Std. Deviation | 0.89 | 16.05 |
| Alpha | -0.03 | -1.03 |
| Beta | 0.18 | 1.1 |
| Sharpe Ratio | 0.54 | 0.91 |
| Treynor Ratio | 2.6 | 12.98 |
The iShares 1-3 Year Treasury Bond ETF (SHY) has a Sharpe Ratio of 0.54 with a R-squared of 39.11 and a Standard Deviation of 0.89. Its Treynor Ratio is 2.6 while SHY’s Mean Return is 0.09. Furthermore, the fund has a Beta of 0.18 and a Alpha of -0.03.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Mean Return of 1.27 with a Beta of 1.1 and a Alpha of -1.03. Its R-squared is 87.01 while IWP’s Standard Deviation is 16.05. Furthermore, the fund has a Treynor Ratio of 12.98 and a Sharpe Ratio of 0.91.
SHY’s Mean Return is 1.18 points lower than that of IWP and its R-squared is 47.90 points lower. With a Standard Deviation of 0.89, SHY is slightly less volatile than IWP. The Alpha and Beta of SHY are 1.00 points higher and 0.92 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | SHY | IWP |
| 2020 | 3.01% | 35.29% |
| 2019 | 3.42% | 35.14% |
| 2018 | 1.45% | -4.95% |
| 2017 | 0.27% | 24.98% |
| 2016 | 0.75% | 7.15% |
| 2015 | 0.43% | -0.39% |
| 2014 | 0.48% | 11.68% |
| 2013 | 0.23% | 35.44% |
| 2012 | 0.31% | 15.62% |
| 2011 | 1.43% | -1.82% |
| 2010 | 2.23% | 26.1% |
SHY had its best year in 2019 with an annual return of 3.42%. SHY’s worst year over the past decade yielded 0.23% and occurred in 2013. In most years the iShares 1-3 Year Treasury Bond ETF provided moderate returns such as in 2014, 2016, and 2011 where annual returns amounted to 0.48%, 0.75%, and 1.43% respectively.
The year 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SHY | $10,000 | $11,486 | 1.27% |
| IWP | $10,000 | $50,191 | 16.75% |
A $10,000 investment in SHY would have resulted in a final balance of $11,486. This is a profit of $1,486 over 11 years and amounts to a compound annual growth rate (CAGR) of 1.27%.
With a $10,000 investment in IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.
SHY’s CAGR is 15.48 percentage points lower than that of IWP and as a result, would have yielded $38,705 less on a $10,000 investment. Thus, SHY performed worse than IWP by 15.48% annually.
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