The iShares Russell 1000 Value ETF (IWD) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and IUSB is a iShares N/A fund. So, what’s the difference between IWD and IUSB? And which fund is better?
The expense ratio of IWD is 0.13 percentage points higher than IUSB’s (0.19% vs. 0.06%). IWD also has a high exposure to the financial services sector while IUSB is mostly comprised of AAA bonds. Overall, IWD has provided higher returns than IUSB over the past ten years.
In this article, we’ll compare IWD vs. IUSB. We’ll look at portfolio growth and performance, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss IWD’s and IUSB’s holdings, industry exposure, and annual returns and examine how these affect their overall returns.
Summary
| IWD | IUSB | |
| Name | iShares Russell 1000 Value ETF | iShares Core Total USD Bond Market ETF |
| Category | Large Value | N/A |
| Issuer | iShares | iShares |
| AUM | 54.1B | 14.49B |
| Avg. Return | 11.40% | 4.13% |
| Div. Yield | 1.57% | 2.1% |
| Expense Ratio | 0.19% | 0.06% |
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 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%.
IWD’s dividend yield is 0.53% lower than that of IUSB (1.57% vs. 2.1%). Also, IWD yielded on average 7.27% more per year over the past decade (11.40% vs. 4.13%). The expense ratio of IWD is 0.13 percentage points higher than IUSB’s (0.19% vs. 0.06%).
Fund Composition
Holdings
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
| 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
| IWD | IUSB | |
| Mean Return | 1.03 | 0 |
| R-squared | 92.38 | 0 |
| Std. Deviation | 14.35 | 0 |
| Alpha | -3.23 | 0 |
| Beta | 1.02 | 0 |
| Sharpe Ratio | 0.81 | 0 |
| Treynor Ratio | 11.06 | 0 |
The iShares Russell 1000 Value ETF (IWD) has a Mean Return of 1.03 with a Sharpe Ratio of 0.81 and a Beta of 1.02. Its Treynor Ratio is 11.06 while IWD’s Standard Deviation is 14.35. Furthermore, the fund has a Alpha of -3.23 and a R-squared of 92.38.
The iShares Core Total USD Bond Market ETF (IUSB) has a Beta of 0 with a Standard Deviation of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while IUSB’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
IWD’s Mean Return is 1.03 points higher than that of IUSB and its R-squared is 92.38 points higher. With a Standard Deviation of 14.35, IWD is slightly more volatile than IUSB. The Alpha and Beta of IWD are 3.23 points lower and 1.02 points higher than IUSB’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | IUSB |
| 2020 | 2.67% | 7.59% |
| 2019 | 26.34% | 9.26% |
| 2018 | -8.4% | -0.38% |
| 2017 | 13.47% | 4.06% |
| 2016 | 17.09% | 3.78% |
| 2015 | -3.95% | 0.46% |
| 2014 | 13.21% | 0.0% |
| 2013 | 32.18% | 0.0% |
| 2012 | 17.28% | 0.0% |
| 2011 | 0.21% | 0.0% |
| 2010 | 15.3% | 0.0% |
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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 |
| IWD | $10,000 | $15,162 | 11.40% |
| IUSB | $10,000 | $12,704 | 4.13% |
A $10,000 investment in IWD would have resulted in a final balance of $15,162. This is a profit of $5,162 over 6 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
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%.
IWD’s CAGR is 7.27 percentage points higher than that of IUSB and as a result, would have yielded $2,458 more on a $10,000 investment. Thus, IWD outperformed IUSB by 7.27% annually.
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