IUSB vs. EFV: What’s The Difference?

The iShares Core Total USD Bond Market ETF (IUSB) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. IUSB is a iShares N/A fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between IUSB and EFV? And which fund is better?

The expense ratio of IUSB is 0.33 percentage points lower than EFV’s (0.06% vs. 0.39%). IUSB is mostly comprised of AAA bonds while EFV has a high exposure to the financial services sector. Overall, IUSB has provided higher returns than EFV over the past 6 years.

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

Summary

IUSB EFV
Name iShares Core Total USD Bond Market ETF iShares MSCI EAFE Value ETF
Category N/A Foreign Large Value
Issuer iShares iShares
AUM 14.49B 14.37B
Avg. Return 4.13% 3.99%
Div. Yield 2.1% 2.94%
Expense Ratio 0.06% 0.39%

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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

IUSB’s dividend yield is 0.84% lower than that of EFV (2.1% vs. 2.94%). Also, IUSB yielded on average 0.13% more per year over the past decade (4.13% vs. 3.99%). The expense ratio of IUSB is 0.33 percentage points lower than EFV’s (0.06% vs. 0.39%).

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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.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

IUSB EFV
Mean Return 0 0.42
R-squared 0 92.15
Std. Deviation 0 16.53
Alpha 0 -1.77
Beta 0 1.05
Sharpe Ratio 0 0.26
Treynor Ratio 0 2.92

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

The iShares MSCI EAFE Value ETF (EFV) has a Alpha of -1.77 with a Sharpe Ratio of 0.26 and a Standard Deviation of 16.53. Its Beta is 1.05 while EFV’s Mean Return is 0.42. Furthermore, the fund has a Treynor Ratio of 2.92 and a R-squared of 92.15.

IUSB’s Mean Return is 0.42 points lower than that of EFV and its R-squared is 92.15 points lower. With a Standard Deviation of 0, IUSB is slightly less volatile than EFV. The Alpha and Beta of IUSB are 1.77 points higher and 1.05 points lower than EFV’s Alpha and Beta.

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Performance

Annual Returns

IUSB vs. EFV - Annual Returns

Year IUSB EFV
2020 7.59% -2.78%
2019 9.26% 15.97%
2018 -0.38% -14.88%
2017 4.06% 21.22%
2016 3.78% 4.87%
2015 0.46% -5.89%
2014 0.0% -5.65%
2013 0.0% 22.61%
2012 0.0% 17.52%
2011 0.0% -12.24%
2010 0.0% 3.18%

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 EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

IUSB vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IUSB $10,000 $12,704 4.13%
EFV $10,000 $11,481 3.99%

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 EFV, the end total would have been $11,481. This equates to a $1,481 profit over 6 years and a compound annual growth rate (CAGR) of 3.99%.

IUSB’s CAGR is 0.13 percentage points higher than that of EFV and as a result, would have yielded $1,223 more on a $10,000 investment. Thus, IUSB outperformed EFV by 0.13% annually.


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