The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and IEF is a iShares Long Government fund. So, what’s the difference between IXUS and IEF? And which fund is better?
The expense ratio of IXUS is 0.06 percentage points lower than IEF’s (0.09% vs. 0.15%). IXUS also has a high exposure to the financial services sector while IEF is mostly comprised of AAA bonds. Overall, IXUS has provided higher returns than IEF over the past ten years.
In this article, we’ll compare IXUS vs. IEF. We’ll look at risk metrics and industry exposure, as well as at their holdings and performance. Moreover, I’ll also discuss IXUS’s and IEF’s fund composition, portfolio growth, and annual returns and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||iShares 7-10 Year Treasury Bond ETF|
|Category||Foreign Large Blend||Long 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 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.
IXUS’s dividend yield is 1.29% higher than that of IEF (2.13% vs. 0.84%). Also, IXUS yielded on average 1.02% more per year over the past decade (6.09% vs. 5.06%). The expense ratio of IXUS is 0.06 percentage points lower than IEF’s (0.09% vs. 0.15%).
|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%.
|IEF Bond Sectors||Weight|
IEF’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 Mean Return of 0 with a Sharpe Ratio of 0 and a R-squared of 0. Its Standard Deviation is 0 while IXUS’s Treynor Ratio is 0. Furthermore, the fund has a Beta of 0 and a Alpha of 0.
The iShares 7-10 Year Treasury Bond ETF (IEF) has a Sharpe Ratio of 0.6 with a Standard Deviation of 5.42 and a Beta of 1.59. Its Treynor Ratio is 1.97 while IEF’s Mean Return is 0.32. Furthermore, the fund has a R-squared of 77.56 and a Alpha of -1.2.
IXUS’s Mean Return is 0.32 points lower than that of IEF and its R-squared is 77.56 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than IEF. The Alpha and Beta of IXUS are 1.20 points higher and 1.59 points lower than IEF’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 2011 was the strongest year for IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% 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 IEF, the end total would have been $13,739. This equates to a $3,739 profit over 7 years and a compound annual growth rate (CAGR) of 5.06%.
IXUS’s CAGR is 1.02 percentage points higher than that of IEF and as a result, would have yielded $470 more on a $10,000 investment. Thus, IXUS outperformed IEF by 1.02% annually.
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