IAU vs. BIV: What’s The Difference?

The iShares Gold Trust (IAU) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. IAU is a iShares N/A fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IAU and BIV? And which fund is better?

The expense ratio of IAU is 0.20 percentage points higher than BIV’s (0.25% vs. 0.05%). IAU also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, IAU has provided higher returns than BIV over the past 11 years.

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

Summary

IAU BIV
Name iShares Gold Trust Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category N/A Intermediate-Term Bond
Issuer iShares Vanguard
AUM 28.61B 39.05B
Avg. Return 6.03% 5.31%
Div. Yield 0.0% 2.06%
Expense Ratio 0.25% 0.05%

The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

IAU’s dividend yield is 2.06% lower than that of BIV (0.0% vs. 2.06%). Also, IAU yielded on average 0.72% more per year over the past decade (6.03% vs. 5.31%). The expense ratio of IAU is 0.20 percentage points higher than BIV’s (0.25% vs. 0.05%).

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Fund Composition

Holdings

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

IAU BIV
Mean Return 0.23 0.35
R-squared 16.03 95.12
Std. Deviation 16.97 4.09
Alpha 4.16 -0.07
Beta 0.48 1.33
Sharpe Ratio 0.13 0.89
Treynor Ratio 1.5 2.72

The iShares Gold Trust (IAU) has a Treynor Ratio of 1.5 with a Standard Deviation of 16.97 and a Alpha of 4.16. Its Beta is 0.48 while IAU’s R-squared is 16.03. Furthermore, the fund has a Mean Return of 0.23 and a Sharpe Ratio of 0.13.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a R-squared of 95.12 with a Mean Return of 0.35 and a Beta of 1.33. Its Sharpe Ratio is 0.89 while BIV’s Standard Deviation is 4.09. Furthermore, the fund has a Treynor Ratio of 2.72 and a Alpha of -0.07.

IAU’s Mean Return is 0.12 points lower than that of BIV and its R-squared is 79.09 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than BIV. The Alpha and Beta of IAU are 4.23 points higher and 0.85 points lower than BIV’s Alpha and Beta.

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Performance

Annual Returns

IAU vs. BIV - Annual Returns

Year IAU BIV
2020 23.86% 9.71%
2019 18.54% 10.19%
2018 -1.39% -0.09%
2017 11.58% 3.8%
2016 8.85% 2.86%
2015 -11.65% 1.23%
2014 -0.44% 7.0%
2013 -27.96% -3.44%
2012 8.37% 7.02%
2011 8.66% 10.62%
2010 27.93% 9.55%

IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% respectively.

The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

IAU vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IAU $10,000 $16,786 6.03%
BIV $10,000 $17,492 5.31%

A $10,000 investment in IAU would have resulted in a final balance of $16,786. This is a profit of $6,786 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.03%.

With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.

IAU’s CAGR is 0.72 percentage points higher than that of BIV and as a result, would have yielded $706 less on a $10,000 investment. Thus, IAU outperformed BIV by 0.72% annually.


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