The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between ITOT and IUSB? And which fund is better?
The expense ratio of ITOT is 0.03 percentage points lower than IUSB’s (0.03% vs. 0.06%). ITOT also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, ITOT has provided higher returns than IUSB over the past ten years.
In this article, we’ll compare ITOT vs. IUSB. We’ll look at risk metrics and holdings, as well as at their fund composition and performance. Moreover, I’ll also discuss ITOT’s and IUSB’s industry exposure, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| ITOT | IUSB | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares Core Total USD Bond Market ETF |
| Category | Large Blend | N/A |
| Issuer | iShares | iShares |
| AUM | 41.97B | 14.49B |
| Avg. Return | 14.59% | 4.13% |
| Div. Yield | 1.2% | 2.1% |
| Expense Ratio | 0.03% | 0.06% |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
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%.
ITOT’s dividend yield is 0.90% lower than that of IUSB (1.2% vs. 2.1%). Also, ITOT yielded on average 10.46% more per year over the past decade (14.59% vs. 4.13%). The expense ratio of ITOT is 0.03 percentage points lower than IUSB’s (0.03% vs. 0.06%).
Fund Composition
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
| 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
| ITOT | IUSB | |
| Mean Return | 1.27 | 0 |
| R-squared | 99.4 | 0 |
| Std. Deviation | 14.02 | 0 |
| Alpha | -0.54 | 0 |
| Beta | 1.03 | 0 |
| Sharpe Ratio | 1.04 | 0 |
| Treynor Ratio | 14.13 | 0 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Mean Return of 1.27 with a Treynor Ratio of 14.13 and a Beta of 1.03. Its Alpha is -0.54 while ITOT’s Standard Deviation is 14.02. Furthermore, the fund has a Sharpe Ratio of 1.04 and a R-squared of 99.4.
The iShares Core Total USD Bond Market ETF (IUSB) has a Standard Deviation of 0 with a R-squared of 0 and a Alpha of 0. Its Treynor Ratio is 0 while IUSB’s Beta is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Mean Return of 0.
ITOT’s Mean Return is 1.27 points higher than that of IUSB and its R-squared is 99.40 points higher. With a Standard Deviation of 14.02, ITOT is slightly more volatile than IUSB. The Alpha and Beta of ITOT are 0.54 points lower and 1.03 points higher than IUSB’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | IUSB |
| 2020 | 20.75% | 7.59% |
| 2019 | 30.87% | 9.26% |
| 2018 | -5.27% | -0.38% |
| 2017 | 21.23% | 4.06% |
| 2016 | 12.59% | 3.78% |
| 2015 | 0.96% | 0.46% |
| 2014 | 13.01% | 0.0% |
| 2013 | 32.67% | 0.0% |
| 2012 | 15.98% | 0.0% |
| 2011 | 1.55% | 0.0% |
| 2010 | 16.15% | 0.0% |
ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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 |
| ITOT | $10,000 | $20,628 | 14.59% |
| IUSB | $10,000 | $12,704 | 4.13% |
A $10,000 investment in ITOT would have resulted in a final balance of $20,628. This is a profit of $10,628 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.59%.
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%.
ITOT’s CAGR is 10.46 percentage points higher than that of IUSB and as a result, would have yielded $7,924 more on a $10,000 investment. Thus, ITOT outperformed IUSB by 10.46% annually.
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