The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. IGSB is a iShares Short-Term Bond fund and IUSB is a iShares N/A fund. So, what’s the difference between IGSB and IUSB? And which fund is better?
IGSB and IUSB have the same expense ratio: 0.06%. IGSB is mostly comprised of BBB bonds and IUSB has a high exposure to AAA bond. Overall, IGSB has provided lower returns than IUSB over the past 6 years.
In this article, we’ll compare IGSB vs. IUSB. We’ll look at performance and portfolio growth, as well as at their holdings and fund composition. Moreover, I’ll also discuss IGSB’s and IUSB’s industry exposure, risk metrics, and annual returns and examine how these affect their overall returns.
Summary
| IGSB | IUSB | |
| Name | iShares 1-5 Year Investment Grade Corporate Bond ETF | iShares Core Total USD Bond Market ETF |
| Category | Short-Term Bond | N/A |
| Issuer | iShares | iShares |
| AUM | 26.63B | 14.49B |
| Avg. Return | 2.51% | 4.13% |
| Div. Yield | 2.02% | 2.1% |
| Expense Ratio | 0.06% | 0.06% |
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is a Short-Term Bond fund that is issued by iShares. It currently has 26.63B total assets under management and has yielded an average annual return of 2.51% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.06%.
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%.
IGSB’s dividend yield is 0.08% lower than that of IUSB (2.02% vs. 2.1%). Also, IGSB yielded on average 1.62% less per year over the past decade (2.51% vs. 4.13%). IGSB and IUSB have the same expense ratio: 0.06%.
Fund Composition
Holdings
| IGSB Bond Sectors | Weight |
| BBB | 50.48% |
| A | 40.04% |
| AA | 7.46% |
| AAA | 2.21% |
| BB | 0.09% |
| Below B | 0.0% |
| B | 0.0% |
| US Government | 0.0% |
| Others | -0.28% |
IGSB’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and BB at 50.48%, 40.04%, 7.46%, 2.21%, and 0.09%. The fund is less weighted towards Below B (0.0%), B (0.0%), and US Government (0.0%) rated bonds.
| IUSB Bond Sectors | Weight |
| AAA | 58.32% |
| BBB | 16.98% |
| A | 12.27% |
| BB | 4.33% |
| AA | 3.36% |
| B | 2.8% |
| Others | 1.01% |
| Below B | 0.92% |
| US Government | 0.0% |
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.
Risk Analysis
| IGSB | IUSB | |
| Mean Return | 0.19 | 0 |
| R-squared | 26.13 | 0 |
| Std. Deviation | 2 | 0 |
| Alpha | 0.69 | 0 |
| Beta | 0.34 | 0 |
| Sharpe Ratio | 0.82 | 0 |
| Treynor Ratio | 4.82 | 0 |
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a Beta of 0.34 with a R-squared of 26.13 and a Sharpe Ratio of 0.82. Its Standard Deviation is 2 while IGSB’s Mean Return is 0.19. Furthermore, the fund has a Alpha of 0.69 and a Treynor Ratio of 4.82.
The iShares Core Total USD Bond Market ETF (IUSB) has a Sharpe Ratio of 0 with a Treynor Ratio of 0 and a Mean Return of 0. Its Alpha is 0 while IUSB’s R-squared is 0. Furthermore, the fund has a Standard Deviation of 0 and a Beta of 0.
IGSB’s Mean Return is 0.19 points higher than that of IUSB and its R-squared is 26.13 points higher. With a Standard Deviation of 2, IGSB is slightly more volatile than IUSB. The Alpha and Beta of IGSB are 0.69 points higher and 0.34 points higher than IUSB’s Alpha and Beta.
Performance
Annual Returns
| Year | IGSB | IUSB |
| 2020 | 5.26% | 7.59% |
| 2019 | 7.01% | 9.26% |
| 2018 | 1.34% | -0.38% |
| 2017 | 1.41% | 4.06% |
| 2016 | 1.77% | 3.78% |
| 2015 | 0.7% | 0.46% |
| 2014 | 0.74% | 0.0% |
| 2013 | 1.03% | 0.0% |
| 2012 | 3.28% | 0.0% |
| 2011 | 1.34% | 0.0% |
| 2010 | 3.69% | 0.0% |
IGSB had its best year in 2019 with an annual return of 7.01%. IGSB’s worst year over the past decade yielded 0.7% and occurred in 2015. In most years the iShares 1-5 Year Investment Grade Corporate Bond ETF provided moderate returns such as in 2011, 2017, and 2016 where annual returns amounted to 1.34%, 1.41%, and 1.77% 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.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IGSB | $10,000 | $11,863 | 2.51% |
| IUSB | $10,000 | $12,704 | 4.13% |
A $10,000 investment in IGSB would have resulted in a final balance of $11,863. This is a profit of $1,863 over 6 years and amounts to a compound annual growth rate (CAGR) of 2.51%.
With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
IGSB’s CAGR is 1.62 percentage points lower than that of IUSB and as a result, would have yielded $841 less on a $10,000 investment. Thus, IGSB performed worse than IUSB by 1.62% annually.
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