The iShares Core MSCI EAFE ETF (IEFA) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. IEFA is a iShares Foreign Large Blend fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between IEFA and JPST? And which fund is better?
The expense ratio of IEFA is 0.11 percentage points lower than JPST’s (0.07% vs. 0.18%). IEFA also has a high exposure to the industrials sector while JPST is mostly comprised of A bonds. Overall, IEFA has provided higher returns than JPST over the past ten years.
In this article, we’ll compare IEFA vs. JPST. We’ll look at portfolio growth and holdings, as well as at their risk metrics and performance. Moreover, I’ll also discuss IEFA’s and JPST’s annual returns, fund composition, and industry exposure and examine how these affect their overall returns.
|Name||iShares Core MSCI EAFE ETF||JPMorgan Ultra-Short Income ETF|
|Category||Foreign Large Blend||Ultrashort Bond|
The iShares Core MSCI EAFE ETF (IEFA) is a Foreign Large Blend fund that is issued by iShares. It currently has 95.78B total assets under management and has yielded an average annual return of 5.79% over the past 10 years. The fund has a dividend yield of 2.28% with an expense ratio of 0.07%.
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%.
IEFA’s dividend yield is 1.34% higher than that of JPST (2.28% vs. 0.94%). Also, IEFA yielded on average 3.21% more per year over the past decade (5.79% vs. 2.57%). The expense ratio of IEFA is 0.11 percentage points lower than JPST’s (0.07% vs. 0.18%).
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|ASML Holding NV||1.43%|
|Roche Holding AG||1.31%|
|LVMH Moet Hennessy Louis Vuitton SE||1.08%|
|Toyota Motor Corp||0.92%|
|AIA Group Ltd||0.74%|
IEFA’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 1.77%, 1.43%, 1.31%, 1.08%, and 1.0%.
Toyota Motor Corp (0.92%), AstraZeneca PLC (0.78%), and Unilever PLC (0.76%) have a slightly smaller but still significant weight. AIA Group Ltd and SAP SE are also represented in the IEFA’s holdings at 0.74% and 0.73%.
|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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IEFA had its best year in 2017 with an annual return of 26.42%. IEFA’s worst year over the past decade yielded -14.2% and occurred in 2018. In most years the iShares Core MSCI EAFE ETF provided moderate returns such as in 2010, 2015, and 2016 where annual returns amounted to 0.0%, 0.53%, and 1.36% 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 IEFA would have resulted in a final balance of $11,424. This is a profit of $1,424 over 3 years and amounts to a compound annual growth rate (CAGR) of 5.79%.
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%.
IEFA’s CAGR is 3.21 percentage points higher than that of JPST and as a result, would have yielded $633 more on a $10,000 investment. Thus, IEFA outperformed JPST by 3.21% annually.
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