The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares MBS ETF (MBB) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and MBB is a iShares Intermediate Government fund. So, what’s the difference between IXUS and MBB? And which fund is better?
The expense ratio of IXUS is 0.03 percentage points higher than MBB’s (0.09% vs. 0.06%). IXUS also has a high exposure to the financial services sector while MBB is mostly comprised of AAA bonds. Overall, IXUS has provided higher returns than MBB over the past ten years.
In this article, we’ll compare IXUS vs. MBB. We’ll look at performance and industry exposure, as well as at their risk metrics and holdings. Moreover, I’ll also discuss IXUS’s and MBB’s annual returns, portfolio growth, and fund composition and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||iShares MBS 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 MBS ETF (MBB) is a Intermediate Government fund that is issued by iShares. It currently has 25.69B total assets under management and has yielded an average annual return of 3.08% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.06%.
IXUS’s dividend yield is 0.25% higher than that of MBB (2.13% vs. 1.88%). Also, IXUS yielded on average 3.01% more per year over the past decade (6.09% vs. 3.08%). The expense ratio of IXUS is 0.03 percentage points higher than MBB’s (0.09% vs. 0.06%).
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|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%.
|MBB Bond Sectors||Weight|
MBB’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.51%, 0.49%, 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.
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The iShares Core MSCI Total International Stock ETF (IXUS) has a Standard Deviation of 0 with a Beta of 0 and a Alpha of 0. Its Mean Return is 0 while IXUS’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Treynor Ratio of 0.
The iShares MBS ETF (MBB) has a Treynor Ratio of 3.02 with a Standard Deviation of 2.12 and a R-squared of 74.38. Its Mean Return is 0.2 while MBB’s Alpha is 0.14. Furthermore, the fund has a Sharpe Ratio of 0.87 and a Beta of 0.6.
IXUS’s Mean Return is 0.20 points lower than that of MBB and its R-squared is 74.38 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than MBB. The Alpha and Beta of IXUS are 0.14 points lower and 0.60 points lower than MBB’s Alpha and Beta.
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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 MBB, returning 6.27% on an annual basis. The poorest year for MBB in the last ten years was 2013, with a yield of -1.92%. Most years the iShares MBS ETF has given investors modest returns, such as in 2012, 2017, and 2020, when gains were 2.23%, 2.37%, and 4.03% 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 MBB, the end total would have been $12,423. This equates to a $2,423 profit over 7 years and a compound annual growth rate (CAGR) of 3.08%.
IXUS’s CAGR is 3.01 percentage points higher than that of MBB and as a result, would have yielded $1,786 more on a $10,000 investment. Thus, IXUS outperformed MBB by 3.01% annually.
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