JPST vs. ACWI: What’s The Difference?

The JPMorgan Ultra-Short Income ETF (JPST) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and ACWI is a iShares N/A fund. So, what’s the difference between JPST and ACWI? And which fund is better?

The expense ratio of JPST is 0.14 percentage points lower than ACWI’s (0.18% vs. 0.32%). JPST is mostly comprised of A bonds while ACWI has a high exposure to the technology sector. Overall, JPST has provided lower returns than ACWI over the past 3 years.

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

Summary

JPST ACWI
Name JPMorgan Ultra-Short Income ETF iShares MSCI ACWI ETF
Category Ultrashort Bond N/A
Issuer JPMorgan iShares
AUM 17.32B 16.85B
Avg. Return 2.57% 10.21%
Div. Yield 0.94% 1.39%
Expense Ratio 0.18% 0.32%

The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

JPST’s dividend yield is 0.45% lower than that of ACWI (0.94% vs. 1.39%). Also, JPST yielded on average 7.64% less per year over the past decade (2.57% vs. 10.21%). The expense ratio of JPST is 0.14 percentage points lower than ACWI’s (0.18% vs. 0.32%).

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Fund Composition

Holdings

JPST - Holdings

JPST Bond Sectors Weight
A 39.21%
BBB 36.75%
AAA 14.9%
AA 9.14%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
JPMorgan Chase & Co 0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

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Risk Analysis

JPST ACWI
Mean Return 0 0.89
R-squared 0 99.96
Std. Deviation 0 14.05
Alpha 0 0.15
Beta 0 1
Sharpe Ratio 0 0.71
Treynor Ratio 0 9.45

The JPMorgan Ultra-Short Income ETF (JPST) has a Mean Return of 0 with a Alpha of 0 and a Treynor Ratio of 0. Its R-squared is 0 while JPST’s Standard Deviation is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.

The iShares MSCI ACWI ETF (ACWI) has a Beta of 1 with a Standard Deviation of 14.05 and a Mean Return of 0.89. Its R-squared is 99.96 while ACWI’s Alpha is 0.15. Furthermore, the fund has a Sharpe Ratio of 0.71 and a Treynor Ratio of 9.45.

JPST’s Mean Return is 0.89 points lower than that of ACWI and its R-squared is 99.96 points lower. With a Standard Deviation of 0, JPST is slightly less volatile than ACWI. The Alpha and Beta of JPST are 0.15 points lower and 1.00 points lower than ACWI’s Alpha and Beta.

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Performance

Annual Returns

JPST vs. ACWI - Annual Returns

Year JPST ACWI
2020 2.17% 16.38%
2019 3.36% 26.7%
2018 2.19% -9.15%
2017 0.0% 24.35%
2016 0.0% 8.22%
2015 0.0% -2.39%
2014 0.0% 4.64%
2013 0.0% 22.91%
2012 0.0% 15.99%
2011 0.0% -7.6%
2010 0.0% 12.31%

JPST had its best year in 2019 with an annual return of 3.36%. JPST’s worst year over the past decade yielded 0.0% and occurred in 2017. In most years the JPMorgan Ultra-Short Income ETF provided moderate returns such as in 2013, 2012, and 2011 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.

The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

JPST vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
JPST $10,000 $10,791 2.57%
ACWI $10,000 $13,396 10.21%

A $10,000 investment in JPST would have resulted in a final balance of $10,791. This is a profit of $791 over 3 years and amounts to a compound annual growth rate (CAGR) of 2.57%.

With a $10,000 investment in ACWI, the end total would have been $13,396. This equates to a $3,396 profit over 3 years and a compound annual growth rate (CAGR) of 10.21%.

JPST’s CAGR is 7.64 percentage points lower than that of ACWI and as a result, would have yielded $2,605 less on a $10,000 investment. Thus, JPST performed worse than ACWI by 7.64% annually.


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