The ARK Innovation ETF (ARKK) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. ARKK is a ARK ETF Trust Mid-Cap Growth fund and IUSB is a iShares N/A fund. So, what’s the difference between ARKK and IUSB? And which fund is better?
The expense ratio of ARKK is 0.69 percentage points higher than IUSB’s (0.75% vs. 0.06%). ARKK also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, ARKK has provided higher returns than IUSB over the past 5 years.
In this article, we’ll compare ARKK vs. IUSB. We’ll look at industry exposure and fund composition, as well as at their performance and risk metrics. Moreover, I’ll also discuss ARKK’s and IUSB’s annual returns, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||ARK Innovation ETF||iShares Core Total USD Bond Market ETF|
|Issuer||ARK ETF Trust||iShares|
The ARK Innovation ETF (ARKK) is a Mid-Cap Growth fund that is issued by ARK ETF Trust. It currently has 25.52B total assets under management and has yielded an average annual return of 55.45% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.75%.
The iShares Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
ARKK’s dividend yield is 2.10% lower than that of IUSB (0.0% vs. 2.1%). Also, ARKK yielded on average 51.32% more per year over the past decade (55.45% vs. 4.13%). The expense ratio of ARKK is 0.69 percentage points higher than IUSB’s (0.75% vs. 0.06%).
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|Roku Inc Class A||6.48%|
|Teladoc Health Inc||5.76%|
|Square Inc A||4.37%|
|Zoom Video Communications Inc||4.36%|
|Shopify Inc A||4.27%|
|Spotify Technology SA||3.68%|
|Twilio Inc A||3.66%|
|Coinbase Global Inc Ordinary Shares – Class A||3.65%|
|Unity Software Inc Ordinary Shares||3.41%|
ARKK’s Top Holdings are Tesla Inc, Roku Inc Class A, Teladoc Health Inc, Square Inc A, and Zoom Video Communications Inc at 9.56%, 6.48%, 5.76%, 4.37%, and 4.36%.
Shopify Inc A (4.27%), Spotify Technology SA (3.68%), and Twilio Inc A (3.66%) have a slightly smaller but still significant weight. Coinbase Global Inc Ordinary Shares – Class A and Unity Software Inc Ordinary Shares are also represented in the ARKK’s holdings at 3.65% and 3.41%.
|IUSB Bond Sectors||Weight|
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
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The ARK Innovation ETF (ARKK) has a Alpha of 0 with a Mean Return of 0 and a Sharpe Ratio of 0. Its R-squared is 0 while ARKK’s Beta is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Standard Deviation of 0.
The iShares Core Total USD Bond Market ETF (IUSB) has a Alpha of 0 with a Sharpe Ratio of 0 and a Mean Return of 0. Its Standard Deviation is 0 while IUSB’s Beta is 0. Furthermore, the fund has a Treynor Ratio of 0 and a R-squared of 0.
ARKK’s Mean Return is 0.00 points lower than that of IUSB and its R-squared is 0.00 points lower. With a Standard Deviation of 0, ARKK is slightly less volatile than IUSB. The Alpha and Beta of ARKK are 0.00 points lower and 0.00 points lower than IUSB’s Alpha and Beta.
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ARKK had its best year in 2020 with an annual return of 152.52%. ARKK’s worst year over the past decade yielded -1.96% and occurred in 2016. In most years the ARK Innovation ETF provided moderate returns such as in 2011, 2010, and 2018 where annual returns amounted to 0.0%, 0.0%, and 3.58% respectively.
The year 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in ARKK would have resulted in a final balance of $65,218. This is a profit of $55,218 over 5 years and amounts to a compound annual growth rate (CAGR) of 55.45%.
With a $10,000 investment in IUSB, the end total would have been $12,646. This equates to a $2,646 profit over 5 years and a compound annual growth rate (CAGR) of 4.13%.
ARKK’s CAGR is 51.32 percentage points higher than that of IUSB and as a result, would have yielded $52,572 more on a $10,000 investment. Thus, ARKK outperformed IUSB by 51.32% annually.
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