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IXUS vs. TLT: What’s The Difference?

The iShares Core MSCI Total International Stock ETF (IXUS) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and TLT is a iShares Long Government fund. So, what’s the difference between IXUS and TLT? And which fund is better?

The expense ratio of IXUS is 0.06 percentage points lower than TLT’s (0.09% vs. 0.15%). IXUS also has a high exposure to the financial services sector while TLT is mostly comprised of AAA bonds. Overall, IXUS has provided lower returns than TLT over the past ten years.

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

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Summary

IXUSTLT
NameiShares Core MSCI Total International Stock ETFiShares 20+ Year Treasury Bond ETF
CategoryForeign Large BlendLong Government
IssueriSharesiShares
AUM29.54B15.15B
Avg. Return6.09%9.00%
Div. Yield2.13%1.5%
Expense Ratio0.09%0.15%

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 20+ Year Treasury Bond ETF (TLT) is a Long Government fund that is issued by iShares. It currently has 15.15B total assets under management and has yielded an average annual return of 9.00% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.

IXUS’s dividend yield is 0.63% higher than that of TLT (2.13% vs. 1.5%). Also, IXUS yielded on average 2.91% less per year over the past decade (6.09% vs. 9.00%). The expense ratio of IXUS is 0.06 percentage points lower than TLT’s (0.09% vs. 0.15%).

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Fund Composition

Holdings

IXUS - Holdings

IXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.64%
Tencent Holdings Ltd1.35%
Alibaba Group Holding Ltd Ordinary Shares1.34%
Nestle SA1.1%
Samsung Electronics Co Ltd1.06%
ASML Holding NV0.9%
Roche Holding AG0.81%
LVMH Moet Hennessy Louis Vuitton SE0.67%
Novartis AG0.62%
Toyota Motor Corp0.59%

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%.

TLT - Holdings

TLT Bond SectorsWeight
AAA100.0%
Others0.0%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

TLT’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.

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Risk Analysis

IXUSTLT
Mean Return00.63
R-squared068.76
Std. Deviation012.76
Alpha0-2.83
Beta03.54
Sharpe Ratio00.55
Treynor Ratio01.82

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

The iShares 20+ Year Treasury Bond ETF (TLT) has a Alpha of -2.83 with a R-squared of 68.76 and a Standard Deviation of 12.76. Its Mean Return is 0.63 while TLT’s Beta is 3.54. Furthermore, the fund has a Sharpe Ratio of 0.55 and a Treynor Ratio of 1.82.

IXUS’s Mean Return is 0.63 points lower than that of TLT and its R-squared is 68.76 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than TLT. The Alpha and Beta of IXUS are 2.83 points higher and 3.54 points lower than TLT’s Alpha and Beta.

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Performance

Annual Returns

IXUS vs. TLT - Annual Returns

YearIXUSTLT
202011.14%17.92%
201921.85%14.93%
2018-14.55%-2.07%
201728.08%8.92%
20164.66%1.36%
2015-4.62%-1.65%
2014-3.96%27.35%
201315.85%-13.91%
20120.0%3.25%
20110.0%33.6%
20100.0%9.25%

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 TLT, returning 33.6% on an annual basis. The poorest year for TLT in the last ten years was 2013, with a yield of -13.91%. Most years the iShares 20+ Year Treasury Bond ETF has given investors modest returns, such as in 2012, 2017, and 2010, when gains were 3.25%, 8.92%, and 9.25% respectively.

Portfolio Growth

IXUS vs. TLT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IXUS$10,000$14,2096.09%
TLT$10,000$18,3529.00%

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 TLT, the end total would have been $18,352. This equates to a $8,352 profit over 7 years and a compound annual growth rate (CAGR) of 9.00%.

IXUS’s CAGR is 2.91 percentage points lower than that of TLT and as a result, would have yielded $4,143 less on a $10,000 investment. Thus, IXUS performed worse than TLT by 2.91% annually.


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