The iShares MSCI EAFE ETF (EFA) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. EFA is a iShares Foreign Large Blend fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between EFA and JPST? And which fund is better?
The expense ratio of EFA is 0.14 percentage points higher than JPST’s (0.32% vs. 0.18%). EFA also has a high exposure to the financial services sector while JPST is mostly comprised of A bonds. Overall, EFA has provided higher returns than JPST over the past ten years.
In this article, we’ll compare EFA vs. JPST. We’ll look at performance and risk metrics, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss EFA’s and JPST’s annual returns, industry exposure, and fund composition and examine how these affect their overall returns.
|Name||iShares MSCI EAFE ETF||JPMorgan Ultra-Short Income ETF|
|Category||Foreign Large Blend||Ultrashort Bond|
The iShares MSCI EAFE ETF (EFA) is a Foreign Large Blend fund that is issued by iShares. It currently has 56.77B total assets under management and has yielded an average annual return of 6.47% over the past 10 years. The fund has a dividend yield of 2.28% with an expense ratio of 0.32%.
The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.
EFA’s dividend yield is 1.34% higher than that of JPST (2.28% vs. 0.94%). Also, EFA yielded on average 3.90% more per year over the past decade (6.47% vs. 2.57%). The expense ratio of EFA is 0.14 percentage points higher than JPST’s (0.32% vs. 0.18%).
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|ASML Holding NV||1.69%|
|Roche Holding AG||1.55%|
|LVMH Moet Hennessy Louis Vuitton SE||1.28%|
|Toyota Motor Corp||1.09%|
|AIA Group Ltd||0.88%|
EFA’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.11%, 1.69%, 1.55%, 1.28%, and 1.19%.
Toyota Motor Corp (1.09%), AstraZeneca PLC (0.92%), and Unilever PLC (0.9%) have a slightly smaller but still significant weight. AIA Group Ltd and SAP SE are also represented in the EFA’s holdings at 0.88% and 0.86%.
|JPST Bond Sectors||Weight|
JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.
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The iShares MSCI EAFE ETF (EFA) has a Mean Return of 0.57 with a Beta of 0.98 and a Alpha of 0.47. Its Standard Deviation is 15.01 while EFA’s Sharpe Ratio is 0.41. Furthermore, the fund has a R-squared of 96.78 and a Treynor Ratio of 5.33.
The JPMorgan Ultra-Short Income ETF (JPST) has a Sharpe Ratio of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while JPST’s R-squared is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
EFA’s Mean Return is 0.57 points higher than that of JPST and its R-squared is 96.78 points higher. With a Standard Deviation of 15.01, EFA is slightly more volatile than JPST. The Alpha and Beta of EFA are 0.47 points higher and 0.98 points higher than JPST’s Alpha and Beta.
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EFA had its best year in 2017 with an annual return of 24.94%. EFA’s worst year over the past decade yielded -13.83% and occurred in 2018. In most years the iShares MSCI EAFE ETF provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 0.96%, 7.52%, and 7.92% respectively.
The year 2019 was the strongest year for JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in EFA would have resulted in a final balance of $11,339. This is a profit of $1,339 over 3 years and amounts to a compound annual growth rate (CAGR) of 6.47%.
With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.
EFA’s CAGR is 3.90 percentage points higher than that of JPST and as a result, would have yielded $548 more on a $10,000 investment. Thus, EFA outperformed JPST by 3.90% annually.
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