The iShares Russell 2000 ETF (IWM) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. IWM is a iShares Small Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between IWM and IUSB? And which fund is better?
The expense ratio of IWM is 0.13 percentage points higher than IUSB’s (0.19% vs. 0.06%). IWM also has a high exposure to the healthcare sector while IUSB is mostly comprised of AAA bonds. Overall, IWM has provided higher returns than IUSB over the past ten years.
In this article, we’ll compare IWM vs. IUSB. We’ll look at holdings and industry exposure, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss IWM’s and IUSB’s portfolio growth, annual returns, and performance and examine how these affect their overall returns.
|Name||iShares Russell 2000 ETF||iShares Core Total USD Bond Market ETF|
The iShares Russell 2000 ETF (IWM) is a Small Blend fund that is issued by iShares. It currently has 66.48B total assets under management and has yielded an average annual return of 13.52% over the past 10 years. The fund has a dividend yield of 0.86% 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%.
IWM’s dividend yield is 1.24% lower than that of IUSB (0.86% vs. 2.1%). Also, IWM yielded on average 9.39% more per year over the past decade (13.52% vs. 4.13%). The expense ratio of IWM is 0.13 percentage points higher than IUSB’s (0.19% vs. 0.06%).
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|AMC Entertainment Holdings Inc Class A||0.52%|
|Intellia Therapeutics Inc||0.33%|
|BlackRock Cash Funds Treasury SL Agency||0.29%|
|Tenet Healthcare Corp||0.26%|
|Lattice Semiconductor Corp||0.26%|
|Tetra Tech Inc||0.25%|
|EastGroup Properties Inc||0.24%|
|Arrowhead Pharmaceuticals Inc||0.24%|
IWM’s Top Holdings are AMC Entertainment Holdings Inc Class A, Intellia Therapeutics Inc, Crocs Inc, BlackRock Cash Funds Treasury SL Agency, and Tenet Healthcare Corp at 0.52%, 0.33%, 0.3%, 0.29%, and 0.26%.
Lattice Semiconductor Corp (0.26%), Tetra Tech Inc (0.25%), and II-VI Inc (0.25%) have a slightly smaller but still significant weight. EastGroup Properties Inc and Arrowhead Pharmaceuticals Inc are also represented in the IWM’s holdings at 0.24% and 0.24%.
|IUSB Bond Sectors||Weight|
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.
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The iShares Russell 2000 ETF (IWM) has a Alpha of -5.12 with a Beta of 1.23 and a Sharpe Ratio of 0.68. Its Treynor Ratio is 9.56 while IWM’s R-squared is 77.73. Furthermore, the fund has a Standard Deviation of 18.87 and a Mean Return of 1.12.
The iShares Core Total USD Bond Market ETF (IUSB) has a Mean Return of 0 with a Treynor Ratio of 0 and a R-squared of 0. Its Standard Deviation is 0 while IUSB’s Beta is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.
IWM’s Mean Return is 1.12 points higher than that of IUSB and its R-squared is 77.73 points higher. With a Standard Deviation of 18.87, IWM is slightly more volatile than IUSB. The Alpha and Beta of IWM are 5.12 points lower and 1.23 points higher than IUSB’s Alpha and Beta.
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IWM had its best year in 2013 with an annual return of 38.85%. IWM’s worst year over the past decade yielded -11.02% and occurred in 2018. In most years the iShares Russell 2000 ETF provided moderate returns such as in 2017, 2012, and 2020 where annual returns amounted to 14.66%, 16.39%, and 19.89% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWM would have resulted in a final balance of $17,811. This is a profit of $7,811 over 6 years and amounts to a compound annual growth rate (CAGR) of 13.52%.
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%.
IWM’s CAGR is 9.39 percentage points higher than that of IUSB and as a result, would have yielded $5,107 more on a $10,000 investment. Thus, IWM outperformed IUSB by 9.39% annually.
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