HEEM vs. IWM

Last updated Jun 6, 2026

HEEM (iShares Currency Hedged MSCI Emerging Markets ETF) and IWM (iShares Russell 2000 ETF) are both exchange-traded funds - HEEM is a Emerging Markets Diversified fund tracking the MSCI Emerging Markets 100% USD Hedged Index, while IWM is a Small Cap Blend Equities fund tracking the Russell 2000 Index. Both are passively managed. Over the past 10 years, HEEM returned 10.40%/yr vs 10.54%/yr for IWM. A 0.60 correlation means they provide meaningful diversification when combined. HEEM charges 0.72%/yr vs 0.19%/yr for IWM.

Performance

HEEM vs. IWM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) and iShares Russell 2000 ETF (IWM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, HEEM achieves a 20.85% return, which is significantly higher than IWM's 14.62% return. Both investments have delivered pretty close results over the past 10 years, with HEEM having a 10.40% annualized return and IWM not far ahead at 10.54%.

HEEM

• 1D: -5.76%
• 1M: -2.36%
• YTD: 20.85%
• 6M: 21.68%
• 1Y: 50.37%
• 3Y*: 23.65%
• 5Y*: 8.78%
• 10Y*: 10.40%

IWM

• 1D: -3.55%
• 1M: -1.80%
• YTD: 14.62%
• 6M: 12.89%
• 1Y: 36.52%
• 3Y*: 16.56%
• 5Y*: 5.66%
• 10Y*: 10.54%

*Multi-year figures are annualized to reflect compound growth (CAGR)

HEEM vs. IWM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
HEEM iShares Currency Hedged MSCI Emerging Markets ETF	20.85%	34.02%	12.59%	10.14%	-16.85%	-1.82%	17.94%	18.53%	-11.09%	27.59%
IWM iShares Russell 2000 ETF	14.62%	12.66%	11.38%	16.83%	-20.48%	14.54%	20.03%	25.39%	-11.12%	14.58%

Correlation

The correlation between HEEM and IWM is 0.61, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.61
Correlation (3Y) Calculated over the trailing 3-year period	0.56
Correlation (5Y) Calculated over the trailing 5-year period	0.58
Correlation (10Y) Calculated over the trailing 10-year period	0.59
Correlation (All Time) Calculated using the full available price history since Sep 26, 2014	0.60

The correlation between HEEM and IWM has been stable across timeframes, ranging from 0.56 to 0.61 - a consistent structural relationship.

HEEM vs. IWM - Sectors Allocation Comparison

Sectors	HEEM	IWM
Technology	37.0%	19.5%
Financial Services	19.4%	15.8%
Consumer Cyclical	9.6%	7.8%
Industrials	7.5%	17.1%
Communication Services	6.9%	2.0%
Basic Materials	6.5%	4.5%
Energy	4.0%	6.0%
Consumer Defensive	3.0%	2.1%
Healthcare	2.9%	15.8%
Utilities	2.1%	3.0%
Real Estate	1.1%	5.7%

Return for Risk

HEEM vs. IWM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

HEEM

HEEM Risk / Return Rank: 86
HEEM Sharpe Ratio Rank: 86
HEEM Sortino Ratio Rank: 81
HEEM Omega Ratio Rank: 87
HEEM Calmar Ratio Rank: 86
HEEM Martin Ratio Rank: 88

IWM

IWM Risk / Return Rank: 59
IWM Sharpe Ratio Rank: 56
IWM Sortino Ratio Rank: 55
IWM Omega Ratio Rank: 51
IWM Calmar Ratio Rank: 68
IWM Martin Ratio Rank: 65

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

HEEM vs. IWM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) and iShares Russell 2000 ETF (IWM). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	HEEM	IWM	Difference
Sharpe ratio: Return per unit of total volatility	2.71	1.88	+0.83
Sortino ratio: Return per unit of downside risk	3.44	2.60	+0.84
Omega ratio: Gain probability vs. loss probability	1.52	1.31	+0.21
Calmar ratio: Return relative to maximum drawdown	4.67	3.33	+1.35
Martin ratio: Return relative to average drawdown	18.40	11.78	+6.62
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

HEEM vs. IWM - Sharpe Ratio Comparison

The current HEEM Sharpe Ratio is 2.71, which is higher than the IWM Sharpe Ratio of 1.88. The chart below compares the historical Sharpe Ratios of HEEM and IWM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	HEEM	IWM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.71	1.88	+0.83
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.51	0.25	+0.26
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.58	0.46	+0.12
Sharpe Ratio (All Time) Calculated using the full available price history	0.45	0.36	+0.09

Drawdowns

HEEM vs. IWM - Drawdown Comparison

The maximum HEEM drawdown since its inception was -33.53%, smaller than the maximum IWM drawdown of -59.05%. Use the drawdown chart below to compare losses from any high point for HEEM and IWM.

Drawdown Indicators

	HEEM	IWM	Difference
Max Drawdown Largest peak-to-trough decline	-33.53%	-59.05%	+25.52%
Max Drawdown (1Y) Largest decline over 1 year	-10.83%	-11.03%	+0.20%
Max Drawdown (3Y) Largest decline over 3 years	-14.82%	-27.50%	+12.68%
Max Drawdown (5Y) Largest decline over 5 years	-30.60%	-31.91%	+1.31%
Max Drawdown (10Y) Largest decline over 10 years	-33.53%	-41.13%	+7.60%
Current Drawdown Current decline from peak	-7.80%	-3.55%	-4.25%
Average Drawdown Average peak-to-trough decline	-11.13%	-10.76%	-0.37%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.75%	3.11%	-0.36%

Volatility

HEEM vs. IWM - Volatility Comparison

iShares Currency Hedged MSCI Emerging Markets ETF (HEEM) has a higher volatility of 9.48% compared to iShares Russell 2000 ETF (IWM) at 6.65%. This indicates that HEEM's price experiences larger fluctuations and is considered to be riskier than IWM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	HEEM	IWM	Difference
Volatility (1M) Calculated over the trailing 1-month period	9.48%	6.65%	+2.83%
Volatility (6M) Calculated over the trailing 6-month period	16.57%	14.00%	+2.57%
Volatility (1Y) Calculated over the trailing 1-year period	18.71%	19.54%	-0.83%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.21%	22.58%	-5.37%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.06%	23.06%	-5.00%

HEEM vs. IWM - Expense Ratio Comparison

HEEM has a 0.72% expense ratio, which is higher than IWM's 0.19% expense ratio.

Dividends

HEEM vs. IWM - Dividend Comparison

HEEM's dividend yield for the trailing twelve months is around 3.29%, more than IWM's 0.90% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
HEEM iShares Currency Hedged MSCI Emerging Markets ETF	3.29%	3.98%	2.38%	2.75%	7.49%	1.93%	1.49%	3.04%	2.37%	2.05%	1.84%	6.28%
IWM iShares Russell 2000 ETF	0.90%	1.04%	1.15%	1.35%	1.48%	0.94%	1.04%	1.26%	1.40%	1.26%	1.38%	1.54%

Frequently Asked Questions

Can I hold both HEEM and IWM in my portfolio?

HEEM and IWM have a correlation of 0.61, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, HEEM or IWM?

HEEM has higher volatility (9.48%) compared to IWM (6.65%). In terms of maximum drawdown, HEEM dropped -33.53% vs IWM's -59.05%.

Which ETF is better, HEEM or IWM?

On 10-year performance, IWM leads with 10.54% vs 10.40% for HEEM. On fees, IWM is cheaper at 0.19% per year. On volatility, IWM has been the lower-risk option at 6.65%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, HEEM or IWM?

Over the 10-year period, IWM has performed better with a 10.54% return vs 10.40%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, HEEM or IWM?

IWM is cheaper with a 0.19% expense ratio, compared with 0.72% for HEEM.

Which ETF pays a higher dividend yield, HEEM or IWM?

HEEM has the higher dividend yield at 3.29%, compared with 0.90% for IWM.

What is the main difference between HEEM and IWM?

HEEM is categorized as Emerging Markets Diversified, while IWM is Small Cap Blend Equities. HEEM tracks MSCI Emerging Markets 100% USD Hedged Index, while IWM tracks Russell 2000 Index. Their fees differ too: 0.72% for HEEM and 0.19% for IWM.

Which has better risk-adjusted returns?

HEEM currently has the higher Sharpe Ratio (2.71 vs 1.88), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.