The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares 1-3 Year Treasury Bond ETF (SHY) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and SHY is a iShares Short Government fund. So, what’s the difference between IXUS and SHY? And which fund is better?
The expense ratio of IXUS is 0.06 percentage points lower than SHY’s (0.09% vs. 0.15%). IXUS also has a high exposure to the financial services sector while SHY is mostly comprised of AAA bonds. Overall, IXUS has provided higher returns than SHY over the past ten years.
In this article, we’ll compare IXUS vs. SHY. We’ll look at annual returns and holdings, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss IXUS’s and SHY’s fund composition, performance, and portfolio growth and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
|Name||iShares Core MSCI Total International Stock ETF||iShares 1-3 Year Treasury Bond ETF|
|Category||Foreign Large Blend||Short 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 1-3 Year Treasury Bond ETF (SHY) is a Short Government fund that is issued by iShares. It currently has 19.51B total assets under management and has yielded an average annual return of 1.27% over the past 10 years. The fund has a dividend yield of 0.46% with an expense ratio of 0.15%.
IXUS’s dividend yield is 1.67% higher than that of SHY (2.13% vs. 0.46%). Also, IXUS yielded on average 4.81% more per year over the past decade (6.09% vs. 1.27%). The expense ratio of IXUS is 0.06 percentage points lower than SHY’s (0.09% vs. 0.15%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
|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%.
|SHY Bond Sectors||Weight|
SHY’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.67%, 0.33%, 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 Treynor Ratio of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its Mean Return is 0 while IXUS’s Standard Deviation is 0. Furthermore, the fund has a Alpha of 0 and a R-squared of 0.
The iShares 1-3 Year Treasury Bond ETF (SHY) has a Beta of 0.18 with a Sharpe Ratio of 0.54 and a Treynor Ratio of 2.6. Its Standard Deviation is 0.89 while SHY’s Mean Return is 0.09. Furthermore, the fund has a Alpha of -0.03 and a R-squared of 39.11.
IXUS’s Mean Return is 0.09 points lower than that of SHY and its R-squared is 39.11 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than SHY. The Alpha and Beta of IXUS are 0.03 points higher and 0.18 points lower than SHY’s Alpha and Beta.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
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 SHY, returning 3.42% on an annual basis. The poorest year for SHY in the last ten years was 2013, with a yield of 0.23%. Most years the iShares 1-3 Year Treasury Bond ETF has given investors modest returns, such as in 2014, 2016, and 2011, when gains were 0.48%, 0.75%, and 1.43% 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 SHY, the end total would have been $11,017. This equates to a $1,017 profit over 7 years and a compound annual growth rate (CAGR) of 1.27%.
IXUS’s CAGR is 4.81 percentage points higher than that of SHY and as a result, would have yielded $3,192 more on a $10,000 investment. Thus, IXUS outperformed SHY by 4.81% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.