IWR vs. IUSB: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between IWR and IUSB? And which fund is better?

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

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

Summary

IWR IUSB
Name iShares Russell Mid-Cap ETF iShares Core Total USD Bond Market ETF
Category Mid-Cap Blend N/A
Issuer iShares iShares
AUM 29.84B 14.49B
Avg. Return 14.15% 4.13%
Div. Yield 0.99% 2.1%
Expense Ratio 0.19% 0.06%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% 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%.

IWR’s dividend yield is 1.11% lower than that of IUSB (0.99% vs. 2.1%). Also, IWR yielded on average 10.02% more per year over the past decade (14.15% vs. 4.13%). The expense ratio of IWR is 0.13 percentage points higher than IUSB’s (0.19% vs. 0.06%).

Fund Composition

Holdings

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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

IWR IUSB
Mean Return 1.17 0
R-squared 91.52 0
Std. Deviation 15.66 0
Alpha -2.8 0
Beta 1.11 0
Sharpe Ratio 0.86 0
Treynor Ratio 11.72 0

The iShares Russell Mid-Cap ETF (IWR) has a Standard Deviation of 15.66 with a Alpha of -2.8 and a Beta of 1.11. Its R-squared is 91.52 while IWR’s Treynor Ratio is 11.72. Furthermore, the fund has a Mean Return of 1.17 and a Sharpe Ratio of 0.86.

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

IWR’s Mean Return is 1.17 points higher than that of IUSB and its R-squared is 91.52 points higher. With a Standard Deviation of 15.66, IWR is slightly more volatile than IUSB. The Alpha and Beta of IWR are 2.80 points lower and 1.11 points higher than IUSB’s Alpha and Beta.

Performance

Annual Returns

IWR vs. IUSB - Annual Returns

Year IWR IUSB
2020 16.91% 7.59%
2019 30.31% 9.26%
2018 -9.13% -0.38%
2017 18.32% 4.06%
2016 13.58% 3.78%
2015 -2.57% 0.46%
2014 13.03% 0.0%
2013 34.5% 0.0%
2012 17.13% 0.0%
2011 -1.67% 0.0%
2010 25.25% 0.0%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% 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

IWR vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $18,126 14.15%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in IWR would have resulted in a final balance of $18,126. This is a profit of $8,126 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

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%.

IWR’s CAGR is 10.02 percentage points higher than that of IUSB and as a result, would have yielded $5,422 more on a $10,000 investment. Thus, IWR outperformed IUSB by 10.02% annually.


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