The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between IXUS and EMB? And which fund is better?
The expense ratio of IXUS is 0.30 percentage points lower than EMB’s (0.09% vs. 0.39%). IXUS also has a high exposure to the financial services sector while EMB is mostly comprised of BBB bonds. Overall, IXUS has provided lower returns than EMB over the past ten years.
In this article, we’ll compare IXUS vs. EMB. We’ll look at fund composition and risk metrics, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss IXUS’s and EMB’s industry exposure, performance, and annual returns and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||iShares J.P. Morgan USD Emerging Markets Bond ETF|
|Category||Foreign Large Blend||Emerging Markets Bond|
The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.
IXUS’s dividend yield is 1.72% lower than that of EMB (2.13% vs. 3.85%). Also, IXUS yielded on average 0.35% less per year over the past decade (6.09% vs. 6.43%). The expense ratio of IXUS is 0.30 percentage points lower than EMB’s (0.09% vs. 0.39%).
|Taiwan Semiconductor Manufacturing Co Ltd||1.64%|
|Tencent Holdings Ltd||1.35%|
|Alibaba Group Holding Ltd Ordinary Shares||1.34%|
|Samsung Electronics Co Ltd||1.06%|
|ASML Holding NV||0.9%|
|Roche Holding AG||0.81%|
|LVMH Moet Hennessy Louis Vuitton SE||0.67%|
|Toyota Motor Corp||0.59%|
IXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.
ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.
|EMB Bond Sectors||Weight|
EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.
The iShares Core MSCI Total International Stock ETF (IXUS) has a R-squared of 0 with a Treynor Ratio of 0 and a Sharpe Ratio of 0. Its Standard Deviation is 0 while IXUS’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a Mean Return of 0.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a Beta of 1.36 with a Mean Return of 0.44 and a Alpha of 0.89. Its Treynor Ratio is 3.24 while EMB’s Sharpe Ratio is 0.55. Furthermore, the fund has a R-squared of 23.34 and a Standard Deviation of 8.44.
IXUS’s Mean Return is 0.44 points lower than that of EMB and its R-squared is 23.34 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than EMB. The Alpha and Beta of IXUS are 0.89 points lower and 1.36 points lower than EMB’s Alpha and Beta.
IXUS had its best year in 2017 with an annual return of 28.08%. IXUS’s worst year over the past decade yielded -14.55% and occurred in 2018. In most years the iShares Core MSCI Total International Stock ETF provided moderate returns such as in 2011, 2010, and 2016 where annual returns amounted to 0.0%, 0.0%, and 4.66% respectively.
The year 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IXUS would have resulted in a final balance of $14,209. This is a profit of $4,209 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.09%.
With a $10,000 investment in EMB, the end total would have been $14,825. This equates to a $4,825 profit over 7 years and a compound annual growth rate (CAGR) of 6.43%.
IXUS’s CAGR is 0.35 percentage points lower than that of EMB and as a result, would have yielded $616 less on a $10,000 investment. Thus, IXUS performed worse than EMB by 0.35% annually.
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