IVW vs. IUSB: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and IUSB is a iShares N/A fund. So, what’s the difference between IVW and IUSB? And which fund is better?

The expense ratio of IVW is 0.12 percentage points higher than IUSB’s (0.18% vs. 0.06%). IVW also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, IVW has provided higher returns than IUSB over the past ten years.

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

Summary

IVW IUSB
Name iShares S&P 500 Growth ETF iShares Core Total USD Bond Market ETF
Category Large Growth N/A
Issuer iShares iShares
AUM 35.72B 14.49B
Avg. Return 16.74% 4.13%
Div. Yield 0.61% 2.1%
Expense Ratio 0.18% 0.06%

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

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%.

IVW’s dividend yield is 1.49% lower than that of IUSB (0.61% vs. 2.1%). Also, IVW yielded on average 12.61% more per year over the past decade (16.74% vs. 4.13%). The expense ratio of IVW is 0.12 percentage points higher than IUSB’s (0.18% vs. 0.06%).

Fund Composition

Holdings

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

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.

Risk Analysis

IVW IUSB
Mean Return 1.44 0
R-squared 93.82 0
Std. Deviation 13.77 0
Alpha 2.19 0
Beta 0.98 0
Sharpe Ratio 1.21 0
Treynor Ratio 17.24 0

The iShares S&P 500 Growth ETF (IVW) has a R-squared of 93.82 with a Sharpe Ratio of 1.21 and a Treynor Ratio of 17.24. Its Mean Return is 1.44 while IVW’s Alpha is 2.19. Furthermore, the fund has a Standard Deviation of 13.77 and a Beta of 0.98.

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

IVW’s Mean Return is 1.44 points higher than that of IUSB and its R-squared is 93.82 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than IUSB. The Alpha and Beta of IVW are 2.19 points higher and 0.98 points higher than IUSB’s Alpha and Beta.

Performance

Annual Returns

IVW vs. IUSB - Annual Returns

Year IVW IUSB
2020 33.21% 7.59%
2019 30.91% 9.26%
2018 -0.17% -0.38%
2017 27.2% 4.06%
2016 6.74% 3.78%
2015 5.33% 0.46%
2014 14.67% 0.0%
2013 32.48% 0.0%
2012 14.39% 0.0%
2011 4.49% 0.0%
2010 14.84% 0.0%

IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% 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

IVW vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $24,896 16.74%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in IVW would have resulted in a final balance of $24,896. This is a profit of $14,896 over 6 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

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%.

IVW’s CAGR is 12.61 percentage points higher than that of IUSB and as a result, would have yielded $12,192 more on a $10,000 investment. Thus, IVW outperformed IUSB by 12.61% annually.


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