IGSB vs. IVE: What’s The Difference?

The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. IGSB is a iShares Short-Term Bond fund and IVE is a iShares Large Value fund. So, what’s the difference between IGSB and IVE? And which fund is better?

The expense ratio of IGSB is 0.12 percentage points lower than IVE’s (0.06% vs. 0.18%). IGSB is mostly comprised of BBB bonds while IVE has a high exposure to the financial services sector. Overall, IGSB has provided lower returns than IVE over the past 11 years.

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

Summary

IGSB IVE
Name iShares 1-5 Year Investment Grade Corporate Bond ETF iShares S&P 500 Value ETF
Category Short-Term Bond Large Value
Issuer iShares iShares
AUM 26.63B 22.4B
Avg. Return 2.51% 11.68%
Div. Yield 2.02% 1.88%
Expense Ratio 0.06% 0.18%

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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

IGSB’s dividend yield is 0.14% higher than that of IVE (2.02% vs. 1.88%). Also, IGSB yielded on average 9.18% less per year over the past decade (2.51% vs. 11.68%). The expense ratio of IGSB is 0.12 percentage points lower than IVE’s (0.06% vs. 0.18%).

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Fund Composition

Holdings

IGSB - 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.

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

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Risk Analysis

IGSB IVE
Mean Return 0.19 1.05
R-squared 26.13 92.08
Std. Deviation 2 14.3
Alpha 0.69 -2.9
Beta 0.34 1.01
Sharpe Ratio 0.82 0.83
Treynor Ratio 4.82 11.41

The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a Beta of 0.34 with a Treynor Ratio of 4.82 and a Mean Return of 0.19. Its Standard Deviation is 2 while IGSB’s Alpha is 0.69. Furthermore, the fund has a R-squared of 26.13 and a Sharpe Ratio of 0.82.

The iShares S&P 500 Value ETF (IVE) has a Alpha of -2.9 with a Sharpe Ratio of 0.83 and a R-squared of 92.08. Its Beta is 1.01 while IVE’s Standard Deviation is 14.3. Furthermore, the fund has a Treynor Ratio of 11.41 and a Mean Return of 1.05.

IGSB’s Mean Return is 0.86 points lower than that of IVE and its R-squared is 65.95 points lower. With a Standard Deviation of 2, IGSB is slightly less volatile than IVE. The Alpha and Beta of IGSB are 3.59 points higher and 0.67 points lower than IVE’s Alpha and Beta.

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Performance

Annual Returns

IGSB vs. IVE - Annual Returns

Year IGSB IVE
2020 5.26% 1.24%
2019 7.01% 31.71%
2018 1.34% -9.09%
2017 1.41% 15.19%
2016 1.77% 17.17%
2015 0.7% -3.24%
2014 0.74% 12.14%
2013 1.03% 31.69%
2012 3.28% 17.45%
2011 1.34% -0.63%
2010 3.69% 14.9%

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 IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

IGSB vs. IVE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IGSB $10,000 $13,103 2.51%
IVE $10,000 $31,350 11.68%

A $10,000 investment in IGSB would have resulted in a final balance of $13,103. This is a profit of $3,103 over 11 years and amounts to a compound annual growth rate (CAGR) of 2.51%.

With a $10,000 investment in IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

IGSB’s CAGR is 9.18 percentage points lower than that of IVE and as a result, would have yielded $18,247 less on a $10,000 investment. Thus, IGSB performed worse than IVE by 9.18% annually.


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