The iShares Core Total USD Bond Market ETF (IUSB) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. IUSB is a iShares N/A fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between IUSB and DFAC? And which fund is better?

The expense ratio of IUSB is 0.13 percentage points lower than DFAC’s (0.06% vs. 0.19%). IUSB is mostly comprised of AAA bonds while DFAC has a high exposure to the technology sector. Overall, IUSB has provided lower returns than DFAC over the past 6 years.

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

Summary

IUSBDFAC
NameiShares Core Total USD Bond Market ETFDimensional U.S. Core Equity 2 ETF
CategoryN/ALarge Blend
IssueriSharesDimensional Fund Advisors
AUM14.49B13.53B
Avg. Return4.13%13.93%
Div. Yield2.1%1.0%
Expense Ratio0.06%0.19%

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 Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.

IUSB’s dividend yield is 1.10% higher than that of DFAC (2.1% vs. 1.0%). Also, IUSB yielded on average 9.80% less per year over the past decade (4.13% vs. 13.93%). The expense ratio of IUSB is 0.13 percentage points lower than DFAC’s (0.06% vs. 0.19%).

Fund Composition

Holdings

IUSB - Holdings

IUSB Bond SectorsWeight
AAA58.32%
BBB16.98%
A12.27%
BB4.33%
AA3.36%
B2.8%
Others1.01%
Below B0.92%
US Government0.0%

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.

DFAC - Holdings

DFAC HoldingsWeight
Apple Inc4.7%
Microsoft Corp3.81%
Amazon.com Inc2.39%
Johnson & Johnson1.05%
Facebook Inc Class A1.05%
JPMorgan Chase & Co1.0%
Alphabet Inc Class C0.85%
Alphabet Inc Class A0.84%
Berkshire Hathaway Inc Class B0.75%
Visa Inc Class A0.74%

DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.

JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.

Risk Analysis

IUSBDFAC
Mean Return01.19
R-squared095.1
Std. Deviation015.55
Alpha0-2.75
Beta01.12
Sharpe Ratio00.88
Treynor Ratio011.85

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

The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Beta of 1.12 with a Treynor Ratio of 11.85 and a Standard Deviation of 15.55. Its Sharpe Ratio is 0.88 while DFAC’s R-squared is 95.1. Furthermore, the fund has a Mean Return of 1.19 and a Alpha of -2.75.

IUSB’s Mean Return is 1.19 points lower than that of DFAC and its R-squared is 95.10 points lower. With a Standard Deviation of 0, IUSB is slightly less volatile than DFAC. The Alpha and Beta of IUSB are 2.75 points higher and 1.12 points lower than DFAC’s Alpha and Beta.

Performance

Annual Returns

IUSB vs. DFAC - Annual Returns

YearIUSBDFAC
20207.59%15.8%
20199.26%29.54%
2018-0.38%-9.43%
20174.06%18.82%
20163.78%16.31%
20150.46%-2.53%
20140.0%9.56%
20130.0%37.55%
20120.0%17.93%
20110.0%-1.96%
20100.0%21.67%

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 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.

Portfolio Growth

IUSB vs. DFAC - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IUSB$10,000$12,7044.13%
DFAC$10,000$18,30013.93%

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 DFAC, the end total would have been $18,300. This equates to a $8,300 profit over 6 years and a compound annual growth rate (CAGR) of 13.93%.

IUSB’s CAGR is 9.80 percentage points lower than that of DFAC and as a result, would have yielded $5,596 less on a $10,000 investment. Thus, IUSB performed worse than DFAC by 9.80% annually.

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