JPST vs. IEF: What’s The Difference?

The JPMorgan Ultra-Short Income ETF (JPST) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and IEF is a iShares Long Government fund. So, what’s the difference between JPST and IEF? And which fund is better?

The expense ratio of JPST is 0.03 percentage points higher than IEF’s (0.18% vs. 0.15%). JPST is mostly comprised of A bonds and IEF has a high exposure to AAA bond. Overall, JPST has provided lower returns than IEF over the past 3 years.

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

Summary

JPST IEF
Name JPMorgan Ultra-Short Income ETF iShares 7-10 Year Treasury Bond ETF
Category Ultrashort Bond Long Government
Issuer JPMorgan iShares
AUM 17.32B 13.44B
Avg. Return 2.57% 5.06%
Div. Yield 0.94% 0.84%
Expense Ratio 0.18% 0.15%

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 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.

JPST’s dividend yield is 0.10% higher than that of IEF (0.94% vs. 0.84%). Also, JPST yielded on average 2.49% less per year over the past decade (2.57% vs. 5.06%). The expense ratio of JPST is 0.03 percentage points higher than IEF’s (0.18% vs. 0.15%).

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.

IEF - Holdings

IEF Bond Sectors Weight
AAA 100.0%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

IEF’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.

Risk Analysis

JPST IEF
Mean Return 0 0.32
R-squared 0 77.56
Std. Deviation 0 5.42
Alpha 0 -1.2
Beta 0 1.59
Sharpe Ratio 0 0.6
Treynor Ratio 0 1.97

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

The iShares 7-10 Year Treasury Bond ETF (IEF) has a R-squared of 77.56 with a Mean Return of 0.32 and a Treynor Ratio of 1.97. Its Standard Deviation is 5.42 while IEF’s Alpha is -1.2. Furthermore, the fund has a Sharpe Ratio of 0.6 and a Beta of 1.59.

JPST’s Mean Return is 0.32 points lower than that of IEF and its R-squared is 77.56 points lower. With a Standard Deviation of 0, JPST is slightly less volatile than IEF. The Alpha and Beta of JPST are 1.20 points higher and 1.59 points lower than IEF’s Alpha and Beta.

Performance

Annual Returns

JPST vs. IEF - Annual Returns

Year JPST IEF
2020 2.17% 9.84%
2019 3.36% 8.38%
2018 2.19% 0.82%
2017 0.0% 2.47%
2016 0.0% 1.0%
2015 0.0% 1.55%
2014 0.0% 8.92%
2013 0.0% -6.12%
2012 0.0% 4.06%
2011 0.0% 15.46%
2010 0.0% 9.29%

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 2011 was the strongest year for IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% respectively.

Portfolio Growth

JPST vs. IEF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
JPST $10,000 $10,791 2.57%
IEF $10,000 $12,002 5.06%

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 IEF, the end total would have been $12,002. This equates to a $2,002 profit over 3 years and a compound annual growth rate (CAGR) of 5.06%.

JPST’s CAGR is 2.49 percentage points lower than that of IEF and as a result, would have yielded $1,211 less on a $10,000 investment. Thus, JPST performed worse than IEF by 2.49% annually.


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