The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and HYG is a iShares High Yield Bond fund. So, what’s the difference between IXUS and HYG? And which fund is better?
The expense ratio of IXUS is 0.39 percentage points lower than HYG’s (0.09% vs. 0.48%). IXUS also has a high exposure to the financial services sector while HYG is mostly comprised of BB bonds. Overall, IXUS has provided lower returns than HYG over the past ten years.
In this article, we’ll compare IXUS vs. HYG. We’ll look at risk metrics and portfolio growth, as well as at their holdings and fund composition. Moreover, I’ll also discuss IXUS’s and HYG’s annual returns, performance, and industry exposure and examine how these affect their overall returns.
Summary
| IXUS | HYG | |
| Name | iShares Core MSCI Total International Stock ETF | iShares iBoxx $ High Yield Corporate Bond ETF |
| Category | Foreign Large Blend | High Yield Bond |
| Issuer | iShares | iShares |
| AUM | 29.54B | 20.03B |
| Avg. Return | 6.09% | 6.42% |
| Div. Yield | 2.13% | 4.44% |
| Expense Ratio | 0.09% | 0.48% |
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 iBoxx $ High Yield Corporate Bond ETF (HYG) is a High Yield Bond fund that is issued by iShares. It currently has 20.03B total assets under management and has yielded an average annual return of 6.42% over the past 10 years. The fund has a dividend yield of 4.44% with an expense ratio of 0.48%.
IXUS’s dividend yield is 2.31% lower than that of HYG (2.13% vs. 4.44%). Also, IXUS yielded on average 0.33% less per year over the past decade (6.09% vs. 6.42%). The expense ratio of IXUS is 0.39 percentage points lower than HYG’s (0.09% vs. 0.48%).
Fund Composition
Holdings
| IXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.64% |
| Tencent Holdings Ltd | 1.35% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.34% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.06% |
| ASML Holding NV | 0.9% |
| Roche Holding AG | 0.81% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.67% |
| Novartis AG | 0.62% |
| 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%.
| HYG Bond Sectors | Weight |
| BB | 56.53% |
| B | 31.27% |
| Below B | 11.4% |
| BBB | 0.61% |
| AAA | 0.28% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
| Others | -0.09% |
HYG’s Top Bond Sectors are ratings of BB, B, Below B, BBB, and AAA at 56.53%, 31.27%, 11.4%, 0.61%, and 0.28%. The fund is less weighted towards A (0.0%), AA (0.0%), and US Government (0.0%) rated bonds.
Risk Analysis
| IXUS | HYG | |
| Mean Return | 0 | 0.46 |
| R-squared | 0 | 4.1 |
| Std. Deviation | 0 | 6.96 |
| Alpha | 0 | 3.58 |
| Beta | 0 | 0.48 |
| Sharpe Ratio | 0 | 0.7 |
| Treynor Ratio | 0 | 10.01 |
The iShares Core MSCI Total International Stock ETF (IXUS) has a Standard Deviation of 0 with a Alpha of 0 and a R-squared of 0. Its Sharpe Ratio is 0 while IXUS’s Treynor Ratio is 0. Furthermore, the fund has a Beta of 0 and a Mean Return of 0.
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has a Alpha of 3.58 with a R-squared of 4.1 and a Sharpe Ratio of 0.7. Its Treynor Ratio is 10.01 while HYG’s Beta is 0.48. Furthermore, the fund has a Mean Return of 0.46 and a Standard Deviation of 6.96.
IXUS’s Mean Return is 0.46 points lower than that of HYG and its R-squared is 4.10 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than HYG. The Alpha and Beta of IXUS are 3.58 points lower and 0.48 points lower than HYG’s Alpha and Beta.
Performance
Annual Returns
| Year | IXUS | HYG |
| 2020 | 11.14% | 4.12% |
| 2019 | 21.85% | 14.23% |
| 2018 | -14.55% | -1.93% |
| 2017 | 28.08% | 6.09% |
| 2016 | 4.66% | 13.92% |
| 2015 | -4.62% | -5.55% |
| 2014 | -3.96% | 2.0% |
| 2013 | 15.85% | 5.9% |
| 2012 | 0.0% | 13.83% |
| 2011 | 0.0% | 5.89% |
| 2010 | 0.0% | 12.07% |
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 2019 was the strongest year for HYG, returning 14.23% on an annual basis. The poorest year for HYG in the last ten years was 2015, with a yield of -5.55%. Most years the iShares iBoxx $ High Yield Corporate Bond ETF has given investors modest returns, such as in 2011, 2013, and 2017, when gains were 5.89%, 5.9%, and 6.09% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IXUS | $10,000 | $14,209 | 6.09% |
| HYG | $10,000 | $13,580 | 6.42% |
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 HYG, the end total would have been $13,580. This equates to a $3,580 profit over 7 years and a compound annual growth rate (CAGR) of 6.42%.
IXUS’s CAGR is 0.33 percentage points lower than that of HYG and as a result, would have yielded $629 more on a $10,000 investment. Thus, IXUS performed worse than HYG by 0.33% annually.
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