The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares U.S. Treasury Bond ETF (GOVT) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and GOVT is a iShares Intermediate Government fund. So, what’s the difference between IXUS and GOVT? And which fund is better?
The expense ratio of IXUS is 0.04 percentage points higher than GOVT’s (0.09% vs. 0.05%). IXUS also has a high exposure to the financial services sector while GOVT is mostly comprised of AAA bonds. Overall, IXUS has provided higher returns than GOVT over the past ten years.
In this article, we’ll compare IXUS vs. GOVT. We’ll look at performance and annual returns, as well as at their holdings and industry exposure. Moreover, I’ll also discuss IXUS’s and GOVT’s portfolio growth, fund composition, and risk metrics and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||iShares U.S. Treasury Bond ETF|
|Category||Foreign Large Blend||Intermediate Government|
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 U.S. Treasury Bond ETF (GOVT) is a Intermediate Government fund that is issued by iShares. It currently has 17.07B total assets under management and has yielded an average annual return of 2.67% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.05%.
IXUS’s dividend yield is 1.13% higher than that of GOVT (2.13% vs. 1.0%). Also, IXUS yielded on average 3.41% more per year over the past decade (6.09% vs. 2.67%). The expense ratio of IXUS is 0.04 percentage points higher than GOVT’s (0.09% vs. 0.05%).
|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%.
|GOVT Bond Sectors||Weight|
GOVT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a Sharpe Ratio of 0 and a Treynor Ratio of 0. Its R-squared is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Standard Deviation of 0.
The iShares U.S. Treasury Bond ETF (GOVT) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Mean Return is 0 while GOVT’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a Treynor Ratio of 0.
IXUS’s Mean Return is 0.00 points lower than that of GOVT and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than GOVT. The Alpha and Beta of IXUS are 0.00 points lower and 0.00 points lower than GOVT’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 2020 was the strongest year for GOVT, returning 7.92% on an annual basis. The poorest year for GOVT in the last ten years was 2013, with a yield of -2.84%. Most years the iShares U.S. Treasury Bond ETF has given investors modest returns, such as in 2018, 2015, and 2016, when gains were 0.74%, 0.76%, and 0.92% 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 GOVT, the end total would have been $12,656. This equates to a $2,656 profit over 7 years and a compound annual growth rate (CAGR) of 2.67%.
IXUS’s CAGR is 3.41 percentage points higher than that of GOVT and as a result, would have yielded $1,553 more on a $10,000 investment. Thus, IXUS outperformed GOVT by 3.41% annually.
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