The JPMorgan Ultra-Short Income ETF (JPST) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and TLT is a iShares Long Government fund. So, what’s the difference between JPST and TLT? And which fund is better?
The expense ratio of JPST is 0.03 percentage points higher than TLT’s (0.18% vs. 0.15%). JPST is mostly comprised of A bonds and TLT has a high exposure to AAA bond. Overall, JPST has provided lower returns than TLT over the past 3 years.
In this article, we’ll compare JPST vs. TLT. We’ll look at performance and annual returns, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss JPST’s and TLT’s risk metrics, fund composition, and industry exposure and examine how these affect their overall returns.
Summary
| JPST | TLT | |
| Name | JPMorgan Ultra-Short Income ETF | iShares 20+ Year Treasury Bond ETF |
| Category | Ultrashort Bond | Long Government |
| Issuer | JPMorgan | iShares |
| AUM | 17.32B | 15.15B |
| Avg. Return | 2.57% | 9.00% |
| Div. Yield | 0.94% | 1.5% |
| 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 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%.
JPST’s dividend yield is 0.56% lower than that of TLT (0.94% vs. 1.5%). Also, JPST yielded on average 6.42% less per year over the past decade (2.57% vs. 9.00%). The expense ratio of JPST is 0.03 percentage points higher than TLT’s (0.18% vs. 0.15%).
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Fund Composition
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.
| TLT 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% |
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
| JPST | TLT | |
| Mean Return | 0 | 0.63 |
| R-squared | 0 | 68.76 |
| Std. Deviation | 0 | 12.76 |
| Alpha | 0 | -2.83 |
| Beta | 0 | 3.54 |
| Sharpe Ratio | 0 | 0.55 |
| Treynor Ratio | 0 | 1.82 |
The JPMorgan Ultra-Short Income ETF (JPST) has a R-squared of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while JPST’s Alpha is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Beta of 0.
The iShares 20+ Year Treasury Bond ETF (TLT) has a R-squared of 68.76 with a Treynor Ratio of 1.82 and a Beta of 3.54. Its Standard Deviation is 12.76 while TLT’s Sharpe Ratio is 0.55. Furthermore, the fund has a Mean Return of 0.63 and a Alpha of -2.83.
JPST’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, JPST is slightly less volatile than TLT. The Alpha and Beta of JPST are 2.83 points higher and 3.54 points lower than TLT’s Alpha and Beta.
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Performance
Annual Returns
| Year | JPST | TLT |
| 2020 | 2.17% | 17.92% |
| 2019 | 3.36% | 14.93% |
| 2018 | 2.19% | -2.07% |
| 2017 | 0.0% | 8.92% |
| 2016 | 0.0% | 1.36% |
| 2015 | 0.0% | -1.65% |
| 2014 | 0.0% | 27.35% |
| 2013 | 0.0% | -13.91% |
| 2012 | 0.0% | 3.25% |
| 2011 | 0.0% | 33.6% |
| 2010 | 0.0% | 9.25% |
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 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
| Fund | Initial Balance | Final Balance | CAGR |
| JPST | $10,000 | $10,791 | 2.57% |
| TLT | $10,000 | $13,272 | 9.00% |
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 TLT, the end total would have been $13,272. This equates to a $3,272 profit over 3 years and a compound annual growth rate (CAGR) of 9.00%.
JPST’s CAGR is 6.42 percentage points lower than that of TLT and as a result, would have yielded $2,481 less on a $10,000 investment. Thus, JPST performed worse than TLT by 6.42% annually.
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