The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares Preferred and Income Securities ETF (PFF) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and PFF is a iShares Preferred Stock fund. So, what’s the difference between IXUS and PFF? And which fund is better?
The expense ratio of IXUS is 0.37 percentage points lower than PFF’s (0.09% vs. 0.46%). IXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IXUS has provided lower returns than PFF over the past ten years.
In this article, we’ll compare IXUS vs. PFF. We’ll look at portfolio growth and annual returns, as well as at their performance and holdings. Moreover, I’ll also discuss IXUS’s and PFF’s risk metrics, fund composition, and industry exposure and examine how these affect their overall returns.
Summary
| IXUS | PFF | |
| Name | iShares Core MSCI Total International Stock ETF | iShares Preferred and Income Securities ETF |
| Category | Foreign Large Blend | Preferred Stock |
| Issuer | iShares | iShares |
| AUM | 29.54B | 19.8B |
| Avg. Return | 6.09% | 6.90% |
| Div. Yield | 2.13% | 4.47% |
| Expense Ratio | 0.09% | 0.46% |
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 Preferred and Income Securities ETF (PFF) is a Preferred Stock fund that is issued by iShares. It currently has 19.8B total assets under management and has yielded an average annual return of 6.90% over the past 10 years. The fund has a dividend yield of 4.47% with an expense ratio of 0.46%.
IXUS’s dividend yield is 2.34% lower than that of PFF (2.13% vs. 4.47%). Also, IXUS yielded on average 0.81% less per year over the past decade (6.09% vs. 6.90%). The expense ratio of IXUS is 0.37 percentage points lower than PFF’s (0.09% vs. 0.46%).
Fund Composition
Industry Exposure
| IXUS | PFF | |
| Technology | 13.24% | 0.0% |
| Industrials | 12.78% | 10.27% |
| Energy | 4.39% | 0.0% |
| Communication Services | 7.09% | 0.0% |
| Utilities | 2.95% | 81.81% |
| Healthcare | 9.29% | 3.54% |
| Consumer Defensive | 8.19% | 0.0% |
| Real Estate | 3.66% | 0.65% |
| Financial Services | 17.34% | 0.0% |
| Consumer Cyclical | 12.57% | 0.0% |
| Basic Materials | 8.5% | 3.74% |
The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.
IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.
The iShares Preferred and Income Securities ETF (PFF) has the most exposure to the Utilities sector at 81.81%. This is followed by Industrials and Basic Materials at 10.27% and 3.74% respectively. Financial Services (0.0%), Consumer Defensive (0.0%), and Communication Services (0.0%) only make up 0.00% of the fund’s total assets.
PFF’s mid-section with moderate exposure is comprised of Energy, Technology, Real Estate, Healthcare, and Basic Materials stocks at 0.0%, 0.0%, 0.65%, 3.54%, and 3.74%.
IXUS is 17.34% more exposed to the Financial Services sector than PFF (17.34% vs 0.0%). IXUS’s exposure to Technology and Industrials stocks is 13.24% higher and 2.51% higher respectively (13.24% vs. 0.0% and 12.78% vs. 10.27%). In total, Real Estate, Energy, and Communication Services also make up 14.49% more of the fund’s holdings compared to PFF (15.14% vs. 0.65%).
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%.
| PFF Holdings | Weight |
| Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A | 2.54% |
| BlackRock Cash Funds Treasury SL Agency | 2.3% |
| Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L- | 1.79% |
| Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L- | 1.49% |
| ArcelorMittal S.A. 5.5% | 1.36% |
| Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A | 1.35% |
| Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B | 1.14% |
| NextEra Energy Inc Unit | 1.12% |
| Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4 | 1.08% |
| Avantor Inc Ser A | 0.99% |
PFF’s Top Holdings are Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A, BlackRock Cash Funds Treasury SL Agency, Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-, Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-, and ArcelorMittal S.A. 5.5% at 2.54%, 2.3%, 1.79%, 1.49%, and 1.36%.
Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A (1.35%), Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B (1.14%), and NextEra Energy Inc Unit (1.12%) have a slightly smaller but still significant weight. Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4 and Avantor Inc Ser A are also represented in the PFF’s holdings at 1.08% and 0.99%.
Risk Analysis
| IXUS | PFF | |
| Mean Return | 0 | 0.52 |
| R-squared | 0 | 9.39 |
| Std. Deviation | 0 | 7.87 |
| Alpha | 0 | 3.45 |
| Beta | 0 | 0.81 |
| Sharpe Ratio | 0 | 0.72 |
| Treynor Ratio | 0 | 6.79 |
The iShares Core MSCI Total International Stock ETF (IXUS) has a Mean Return of 0 with a Beta of 0 and a R-squared of 0. Its Standard Deviation is 0 while IXUS’s Alpha is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.
The iShares Preferred and Income Securities ETF (PFF) has a R-squared of 9.39 with a Sharpe Ratio of 0.72 and a Mean Return of 0.52. Its Alpha is 3.45 while PFF’s Standard Deviation is 7.87. Furthermore, the fund has a Beta of 0.81 and a Treynor Ratio of 6.79.
IXUS’s Mean Return is 0.52 points lower than that of PFF and its R-squared is 9.39 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than PFF. The Alpha and Beta of IXUS are 3.45 points lower and 0.81 points lower than PFF’s Alpha and Beta.
Performance
Annual Returns
| Year | IXUS | PFF |
| 2020 | 11.14% | 7.94% |
| 2019 | 21.85% | 15.62% |
| 2018 | -14.55% | -4.77% |
| 2017 | 28.08% | 8.33% |
| 2016 | 4.66% | 1.26% |
| 2015 | -4.62% | 4.62% |
| 2014 | -3.96% | 13.45% |
| 2013 | 15.85% | -0.59% |
| 2012 | 0.0% | 18.25% |
| 2011 | 0.0% | -2.2% |
| 2010 | 0.0% | 13.96% |
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 2012 was the strongest year for PFF, returning 18.25% on an annual basis. The poorest year for PFF in the last ten years was 2018, with a yield of -4.77%. Most years the iShares Preferred and Income Securities ETF has given investors modest returns, such as in 2015, 2020, and 2017, when gains were 4.62%, 7.94%, and 8.33% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IXUS | $10,000 | $14,209 | 6.09% |
| PFF | $10,000 | $15,473 | 6.90% |
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 PFF, the end total would have been $15,473. This equates to a $5,473 profit over 7 years and a compound annual growth rate (CAGR) of 6.90%.
IXUS’s CAGR is 0.81 percentage points lower than that of PFF and as a result, would have yielded $1,264 less on a $10,000 investment. Thus, IXUS performed worse than PFF by 0.81% annually.
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