HYG vs. JPST: What’s The Difference?

The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. HYG is a iShares High Yield Bond fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between HYG and JPST? And which fund is better?

The expense ratio of HYG is 0.30 percentage points higher than JPST’s (0.48% vs. 0.18%). HYG is mostly comprised of BB bonds and JPST has a high exposure to A bond. Overall, HYG has provided higher returns than JPST over the past 3 years.

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

Summary

HYG JPST
Name iShares iBoxx $ High Yield Corporate Bond ETF JPMorgan Ultra-Short Income ETF
Category High Yield Bond Ultrashort Bond
Issuer iShares JPMorgan
AUM 20.03B 17.32B
Avg. Return 6.42% 2.57%
Div. Yield 4.44% 0.94%
Expense Ratio 0.48% 0.18%

The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is a High Yield Bond fund that is issued by iShares. It currently has 20.03B total assets under management and has yielded an average annual return of 6.42% over the past 10 years. The fund has a dividend yield of 4.44% with an expense ratio of 0.48%.

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%.

HYG’s dividend yield is 3.50% higher than that of JPST (4.44% vs. 0.94%). Also, HYG yielded on average 3.84% more per year over the past decade (6.42% vs. 2.57%). The expense ratio of HYG is 0.30 percentage points higher than JPST’s (0.48% vs. 0.18%).

Fund Composition

Holdings

HYG - Holdings

HYG Bond Sectors Weight
BB 56.53%
B 31.27%
Below B 11.4%
BBB 0.61%
AAA 0.28%
A 0.0%
AA 0.0%
US Government 0.0%
Others -0.09%

HYG’s Top Bond Sectors are ratings of BB, B, Below B, BBB, and AAA at 56.53%, 31.27%, 11.4%, 0.61%, and 0.28%. The fund is less weighted towards A (0.0%), AA (0.0%), and US Government (0.0%) rated bonds.

JPST - Holdings

JPST Bond Sectors Weight
A 39.21%
BBB 36.75%
AAA 14.9%
AA 9.14%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

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.

Risk Analysis

HYG JPST
Mean Return 0.46 0
R-squared 4.1 0
Std. Deviation 6.96 0
Alpha 3.58 0
Beta 0.48 0
Sharpe Ratio 0.7 0
Treynor Ratio 10.01 0

The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has a Sharpe Ratio of 0.7 with a Treynor Ratio of 10.01 and a R-squared of 4.1. Its Beta is 0.48 while HYG’s Mean Return is 0.46. Furthermore, the fund has a Standard Deviation of 6.96 and a Alpha of 3.58.

The JPMorgan Ultra-Short Income ETF (JPST) has a Alpha of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its R-squared is 0 while JPST’s Mean Return is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Beta of 0.

HYG’s Mean Return is 0.46 points higher than that of JPST and its R-squared is 4.10 points higher. With a Standard Deviation of 6.96, HYG is slightly more volatile than JPST. The Alpha and Beta of HYG are 3.58 points higher and 0.48 points higher than JPST’s Alpha and Beta.

Performance

Annual Returns

HYG vs. JPST - Annual Returns

Year HYG JPST
2020 4.12% 2.17%
2019 14.23% 3.36%
2018 -1.93% 2.19%
2017 6.09% 0.0%
2016 13.92% 0.0%
2015 -5.55% 0.0%
2014 2.0% 0.0%
2013 5.9% 0.0%
2012 13.83% 0.0%
2011 5.89% 0.0%
2010 12.07% 0.0%

HYG had its best year in 2019 with an annual return of 14.23%. HYG’s worst year over the past decade yielded -5.55% and occurred in 2015. In most years the iShares iBoxx $ High Yield Corporate Bond ETF provided moderate returns such as in 2011, 2013, and 2017 where annual returns amounted to 5.89%, 5.9%, and 6.09% 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.

Portfolio Growth

HYG vs. JPST - Portfolio Growth

Fund Initial Balance Final Balance CAGR
HYG $10,000 $11,664 6.42%
JPST $10,000 $10,791 2.57%

A $10,000 investment in HYG would have resulted in a final balance of $11,664. This is a profit of $1,664 over 3 years and amounts to a compound annual growth rate (CAGR) of 6.42%.

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%.

HYG’s CAGR is 3.84 percentage points higher than that of JPST and as a result, would have yielded $873 more on a $10,000 investment. Thus, HYG outperformed JPST by 3.84% annually.


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