Skip to content

USMV vs. ACWI: What’s The Difference?

The iShares MSCI USA Min Vol Factor ETF (USMV) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. USMV is a iShares Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between USMV and ACWI? And which fund is better?

The expense ratio of USMV is 0.17 percentage points lower than ACWI’s (0.15% vs. 0.32%). USMV also has a higher exposure to the technology sector and a lower standard deviation. Overall, USMV has provided higher returns than ACWI over the past 8 years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

USMVACWI
NameiShares MSCI USA Min Vol Factor ETFiShares MSCI ACWI ETF
CategoryLarge BlendN/A
IssueriSharesiShares
AUM27.6B16.85B
Avg. Return13.89%10.21%
Div. Yield1.5%1.39%
Expense Ratio0.15%0.32%

The iShares MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

USMV’s dividend yield is 0.11% higher than that of ACWI (1.5% vs. 1.39%). Also, USMV yielded on average 3.68% more per year over the past decade (13.89% vs. 10.21%). The expense ratio of USMV is 0.17 percentage points lower than ACWI’s (0.15% vs. 0.32%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

USMV vs. ACWI - Industry Exposure

USMVACWI
Technology20.53%20.41%
Industrials10.51%9.65%
Energy0.21%3.48%
Communication Services11.03%9.87%
Utilities6.93%2.61%
Healthcare18.42%11.74%
Consumer Defensive12.82%7.15%
Real Estate2.73%2.75%
Financial Services9.65%15.58%
Consumer Cyclical5.53%12.01%
Basic Materials1.65%4.73%

The iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

USMV is 0.12% more exposed to the Technology sector than ACWI (20.53% vs 20.41%). USMV’s exposure to Healthcare and Consumer Defensive stocks is 6.68% higher and 5.67% higher respectively (18.42% vs. 11.74% and 12.82% vs. 7.15%). In total, Basic Materials, Real Estate, and Consumer Cyclical also make up 9.58% less of the fund’s holdings compared to ACWI (9.91% vs. 19.49%).

Holdings

USMV - Holdings

USMV HoldingsWeight
Eli Lilly and Co1.64%
Microsoft Corp1.62%
T-Mobile US Inc1.51%
Accenture PLC Class A1.51%
Visa Inc Class A1.49%
Waste Management Inc1.45%
Adobe Inc1.45%
The Kroger Co1.44%
Johnson & Johnson1.42%
Gilead Sciences Inc1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

ACWI - Holdings

ACWI HoldingsWeight
Apple Inc3.44%
Microsoft Corp2.91%
Amazon.com Inc2.21%
Facebook Inc A1.25%
Alphabet Inc Class C1.12%
Alphabet Inc A1.09%
Taiwan Semiconductor Manufacturing Co Ltd0.79%
Tesla Inc0.78%
NVIDIA Corp0.74%
JPMorgan Chase & Co0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

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).

Risk Analysis

USMVACWI
Mean Return00.89
R-squared099.96
Std. Deviation014.05
Alpha00.15
Beta01
Sharpe Ratio00.71
Treynor Ratio09.45

The iShares MSCI USA Min Vol Factor ETF (USMV) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Treynor Ratio is 0 while USMV’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Alpha of 0.

The iShares MSCI ACWI ETF (ACWI) has a Mean Return of 0.89 with a R-squared of 99.96 and a Alpha of 0.15. Its Standard Deviation is 14.05 while ACWI’s Beta is 1. Furthermore, the fund has a Treynor Ratio of 9.45 and a Sharpe Ratio of 0.71.

USMV’s Mean Return is 0.89 points lower than that of ACWI and its R-squared is 99.96 points lower. With a Standard Deviation of 0, USMV is slightly less volatile than ACWI. The Alpha and Beta of USMV are 0.15 points lower and 1.00 points lower than ACWI’s Alpha and Beta.

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!

Performance

Annual Returns

USMV vs. ACWI - Annual Returns

YearUSMVACWI
20205.6%16.38%
201927.77%26.7%
20181.36%-9.15%
201718.97%24.35%
201610.5%8.22%
20155.5%-2.39%
201416.34%4.64%
201325.11%22.91%
201211.04%15.99%
20110.0%-7.6%
20100.0%12.31%

USMV had its best year in 2019 with an annual return of 27.77%. USMV’s worst year over the past decade yielded 0.0% and occurred in 2011. In most years the iShares MSCI USA Min Vol Factor ETF provided moderate returns such as in 2020, 2016, and 2012 where annual returns amounted to 5.6%, 10.5%, and 11.04% respectively.

The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

USMV vs. ACWI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
USMV$10,000$27,60713.89%
ACWI$10,000$22,63110.21%

A $10,000 investment in USMV would have resulted in a final balance of $27,607. This is a profit of $17,607 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.89%.

With a $10,000 investment in ACWI, the end total would have been $22,631. This equates to a $12,631 profit over 8 years and a compound annual growth rate (CAGR) of 10.21%.

USMV’s CAGR is 3.68 percentage points higher than that of ACWI and as a result, would have yielded $4,976 more on a $10,000 investment. Thus, USMV outperformed ACWI by 3.68% annually.


Current recommendations:

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.

Leave a Reply

Your email address will not be published. Required fields are marked *