IXUS vs. IGSB: What’s The Difference?

The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and IGSB is a iShares Short-Term Bond fund. So, what’s the difference between IXUS and IGSB? And which fund is better?

The expense ratio of IXUS is 0.03 percentage points higher than IGSB’s (0.09% vs. 0.06%). IXUS also has a high exposure to the financial services sector while IGSB is mostly comprised of BBB bonds. Overall, IXUS has provided higher returns than IGSB over the past ten years.

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

Summary

IXUS IGSB
Name iShares Core MSCI Total International Stock ETF iShares 1-5 Year Investment Grade Corporate Bond ETF
Category Foreign Large Blend Short-Term Bond
Issuer iShares iShares
AUM 29.54B 26.63B
Avg. Return 6.09% 2.51%
Div. Yield 2.13% 2.02%
Expense Ratio 0.09% 0.06%

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 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is a Short-Term Bond fund that is issued by iShares. It currently has 26.63B total assets under management and has yielded an average annual return of 2.51% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.06%.

IXUS’s dividend yield is 0.11% higher than that of IGSB (2.13% vs. 2.02%). Also, IXUS yielded on average 3.58% more per year over the past decade (6.09% vs. 2.51%). The expense ratio of IXUS is 0.03 percentage points higher than IGSB’s (0.09% vs. 0.06%).

Fund Composition

Holdings

IXUS - 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%.

IGSB - Holdings

IGSB Bond Sectors Weight
BBB 50.48%
A 40.04%
AA 7.46%
AAA 2.21%
BB 0.09%
Below B 0.0%
B 0.0%
US Government 0.0%
Others -0.28%

IGSB’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and BB at 50.48%, 40.04%, 7.46%, 2.21%, and 0.09%. The fund is less weighted towards Below B (0.0%), B (0.0%), and US Government (0.0%) rated bonds.

Risk Analysis

IXUS IGSB
Mean Return 0 0.19
R-squared 0 26.13
Std. Deviation 0 2
Alpha 0 0.69
Beta 0 0.34
Sharpe Ratio 0 0.82
Treynor Ratio 0 4.82

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

The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a Standard Deviation of 2 with a Beta of 0.34 and a Sharpe Ratio of 0.82. Its R-squared is 26.13 while IGSB’s Treynor Ratio is 4.82. Furthermore, the fund has a Alpha of 0.69 and a Mean Return of 0.19.

IXUS’s Mean Return is 0.19 points lower than that of IGSB and its R-squared is 26.13 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than IGSB. The Alpha and Beta of IXUS are 0.69 points lower and 0.34 points lower than IGSB’s Alpha and Beta.

Performance

Annual Returns

IXUS vs. IGSB - Annual Returns

Year IXUS IGSB
2020 11.14% 5.26%
2019 21.85% 7.01%
2018 -14.55% 1.34%
2017 28.08% 1.41%
2016 4.66% 1.77%
2015 -4.62% 0.7%
2014 -3.96% 0.74%
2013 15.85% 1.03%
2012 0.0% 3.28%
2011 0.0% 1.34%
2010 0.0% 3.69%

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 IGSB, returning 7.01% on an annual basis. The poorest year for IGSB in the last ten years was 2015, with a yield of 0.7%. Most years the iShares 1-5 Year Investment Grade Corporate Bond ETF has given investors modest returns, such as in 2011, 2017, and 2016, when gains were 1.34%, 1.41%, and 1.77% respectively.

Portfolio Growth

IXUS vs. IGSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IXUS $10,000 $14,209 6.09%
IGSB $10,000 $11,950 2.51%

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 IGSB, the end total would have been $11,950. This equates to a $1,950 profit over 7 years and a compound annual growth rate (CAGR) of 2.51%.

IXUS’s CAGR is 3.58 percentage points higher than that of IGSB and as a result, would have yielded $2,259 more on a $10,000 investment. Thus, IXUS outperformed IGSB by 3.58% annually.


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