IUSB vs. BIV: What’s The Difference?

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

The expense ratio of IUSB is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%). IUSB is mostly comprised of AAA bonds and BIV has a high exposure to AAA bond. Overall, IUSB has provided lower returns than BIV over the past 6 years.

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

Summary

IUSB BIV
Name iShares Core Total USD Bond Market ETF Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category N/A Intermediate-Term Bond
Issuer iShares Vanguard
AUM 14.49B 39.05B
Avg. Return 4.13% 5.31%
Div. Yield 2.1% 2.06%
Expense Ratio 0.06% 0.05%

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%.

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%.

IUSB’s dividend yield is 0.04% higher than that of BIV (2.1% vs. 2.06%). Also, IUSB yielded on average 1.19% less per year over the past decade (4.13% vs. 5.31%). The expense ratio of IUSB is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%).

Fund Composition

Holdings

IUSB - Holdings

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.

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.

Risk Analysis

IUSB BIV
Mean Return 0 0.35
R-squared 0 95.12
Std. Deviation 0 4.09
Alpha 0 -0.07
Beta 0 1.33
Sharpe Ratio 0 0.89
Treynor Ratio 0 2.72

The iShares Core Total USD Bond Market ETF (IUSB) has a Mean Return of 0 with a Alpha of 0 and a Standard Deviation of 0. Its Treynor Ratio is 0 while IUSB’s Sharpe Ratio is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.

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

IUSB’s Mean Return is 0.35 points lower than that of BIV and its R-squared is 95.12 points lower. With a Standard Deviation of 0, IUSB is slightly less volatile than BIV. The Alpha and Beta of IUSB are 0.07 points higher and 1.33 points lower than BIV’s Alpha and Beta.

Performance

Annual Returns

IUSB vs. BIV - Annual Returns

Year IUSB BIV
2020 7.59% 9.71%
2019 9.26% 10.19%
2018 -0.38% -0.09%
2017 4.06% 3.8%
2016 3.78% 2.86%
2015 0.46% 1.23%
2014 0.0% 7.0%
2013 0.0% -3.44%
2012 0.0% 7.02%
2011 0.0% 10.62%
2010 0.0% 9.55%

IUSB had its best year in 2019 with an annual return of 9.26%. IUSB’s worst year over the past decade yielded -0.38% and occurred in 2018. In most years the iShares Core Total USD Bond Market ETF provided moderate returns such as in 2011, 2010, and 2015 where annual returns amounted to 0.0%, 0.0%, and 0.46% 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

IUSB vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IUSB $10,000 $12,704 4.13%
BIV $10,000 $13,054 5.31%

A $10,000 investment in IUSB would have resulted in a final balance of $12,704. This is a profit of $2,704 over 6 years and amounts to a compound annual growth rate (CAGR) of 4.13%.

With a $10,000 investment in BIV, the end total would have been $13,054. This equates to a $3,054 profit over 6 years and a compound annual growth rate (CAGR) of 5.31%.

IUSB’s CAGR is 1.19 percentage points lower than that of BIV and as a result, would have yielded $350 less on a $10,000 investment. Thus, IUSB performed worse than BIV by 1.19% annually.


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