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USMV vs. IWP: What’s The Difference?

The iShares MSCI USA Min Vol Factor ETF (USMV) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. USMV is a iShares Large Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between USMV and IWP? And which fund is better?

The expense ratio of USMV is 0.09 percentage points lower than IWP’s (0.15% vs. 0.24%). USMV also has a lower exposure to the technology sector and a lower standard deviation. Overall, USMV has provided lower returns than IWP over the past 8 years.

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

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Summary

USMVIWP
NameiShares MSCI USA Min Vol Factor ETFiShares Russell Mid-Cap Growth ETF
CategoryLarge BlendMid-Cap Growth
IssueriSharesiShares
AUM27.6B15.7B
Avg. Return13.89%16.75%
Div. Yield1.5%0.26%
Expense Ratio0.15%0.24%

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 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%.

USMV’s dividend yield is 1.24% higher than that of IWP (1.5% vs. 0.26%). Also, USMV yielded on average 2.86% less per year over the past decade (13.89% vs. 16.75%). The expense ratio of USMV is 0.09 percentage points lower than IWP’s (0.15% vs. 0.24%).

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Fund Composition

Industry Exposure

USMV vs. IWP - Industry Exposure

USMVIWP
Technology20.53%33.88%
Industrials10.51%14.09%
Energy0.21%1.51%
Communication Services11.03%6.32%
Utilities6.93%0.16%
Healthcare18.42%16.79%
Consumer Defensive12.82%2.32%
Real Estate2.73%2.46%
Financial Services9.65%4.52%
Consumer Cyclical5.53%16.09%
Basic Materials1.65%1.86%

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 Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

USMV is 13.35% less exposed to the Technology sector than IWP (20.53% vs 33.88%). USMV’s exposure to Healthcare and Consumer Defensive stocks is 1.63% higher and 10.50% higher respectively (18.42% vs. 16.79% and 12.82% vs. 2.32%). In total, Basic Materials, Real Estate, and Consumer Cyclical also make up 10.50% less of the fund’s holdings compared to IWP (9.91% vs. 20.41%).

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%.

IWP - Holdings

IWP HoldingsWeight
IDEXX Laboratories Inc1.3%
DocuSign Inc1.3%
Roku Inc Class A1.29%
Match Group Inc1.06%
Chipotle Mexican Grill Inc1.06%
Pinterest Inc1.05%
Veeva Systems Inc Class A1.04%
Palantir Technologies Inc Ordinary Shares – Class A1.04%
Lululemon Athletica Inc1.01%
DexCom Inc1.0%

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%.

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Risk Analysis

USMVIWP
Mean Return01.27
R-squared087.01
Std. Deviation016.05
Alpha0-1.03
Beta01.1
Sharpe Ratio00.91
Treynor Ratio012.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Mean Return of 1.27 with a Beta of 1.1 and a Standard Deviation of 16.05. Its Alpha is -1.03 while IWP’s R-squared is 87.01. Furthermore, the fund has a Sharpe Ratio of 0.91 and a Treynor Ratio of 12.98.

USMV’s Mean Return is 1.27 points lower than that of IWP and its R-squared is 87.01 points lower. With a Standard Deviation of 0, USMV is slightly less volatile than IWP. The Alpha and Beta of USMV are 1.03 points higher and 1.10 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

USMV vs. IWP - Annual Returns

YearUSMVIWP
20205.6%35.29%
201927.77%35.14%
20181.36%-4.95%
201718.97%24.98%
201610.5%7.15%
20155.5%-0.39%
201416.34%11.68%
201325.11%35.44%
201211.04%15.62%
20110.0%-1.82%
20100.0%26.1%

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 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

USMV vs. IWP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
USMV$10,000$27,60713.89%
IWP$10,000$35,06316.75%

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 IWP, the end total would have been $35,063. This equates to a $25,063 profit over 8 years and a compound annual growth rate (CAGR) of 16.75%.

USMV’s CAGR is 2.86 percentage points lower than that of IWP and as a result, would have yielded $7,456 less on a $10,000 investment. Thus, USMV performed worse than IWP by 2.86% annually.


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