LQD vs. MINT: What’s The Difference?

The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) are both among the Top 100 ETFs. LQD is a iShares Corporate Bond fund and MINT is a PIMCO Ultrashort Bond fund. So, what’s the difference between LQD and MINT? And which fund is better?

The expense ratio of LQD is 0.22 percentage points lower than MINT’s (0.14% vs. 0.36%). LQD is mostly comprised of BBB bonds and MINT has a high exposure to Others bond. Overall, LQD has provided higher returns than MINT over the past ten years.

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

Summary

LQD MINT
Name iShares iBoxx $ Investment Grade Corporate Bond ETF PIMCO Enhanced Short Maturity Active Exchange-Traded Fund
Category Corporate Bond Ultrashort Bond
Issuer iShares PIMCO
AUM 40.23B 14.02B
Avg. Return 6.58% 1.52%
Div. Yield 2.48% 0.56%
Expense Ratio 0.14% 0.36%

The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a Corporate Bond fund that is issued by iShares. It currently has 40.23B total assets under management and has yielded an average annual return of 6.58% over the past 10 years. The fund has a dividend yield of 2.48% with an expense ratio of 0.14%.

The PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) is a Ultrashort Bond fund that is issued by PIMCO. It currently has 14.02B total assets under management and has yielded an average annual return of 1.52% over the past 10 years. The fund has a dividend yield of 0.56% with an expense ratio of 0.36%.

LQD’s dividend yield is 1.92% higher than that of MINT (2.48% vs. 0.56%). Also, LQD yielded on average 5.06% more per year over the past decade (6.58% vs. 1.52%). The expense ratio of LQD is 0.22 percentage points lower than MINT’s (0.14% vs. 0.36%).

Fund Composition

Holdings

LQD - Holdings

LQD Bond Sectors Weight
BBB 50.92%
A 37.97%
AA 8.49%
AAA 2.7%
BB 0.05%
Below B 0.0%
B 0.0%
US Government 0.0%
Others -0.13%

LQD’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and BB at 50.92%, 37.97%, 8.49%, 2.7%, and 0.05%. The fund is less weighted towards Below B (0.0%), B (0.0%), and US Government (0.0%) rated bonds.

MINT - Holdings

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

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

Risk Analysis

LQD MINT
Mean Return 0.47 0.12
R-squared 66.93 4.7
Std. Deviation 5.94 1.08
Alpha 0.52 0.62
Beta 1.62 0.08
Sharpe Ratio 0.85 0.78
Treynor Ratio 3.08 10.8

The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a Standard Deviation of 5.94 with a Sharpe Ratio of 0.85 and a Alpha of 0.52. Its Treynor Ratio is 3.08 while LQD’s Mean Return is 0.47. Furthermore, the fund has a R-squared of 66.93 and a Beta of 1.62.

The PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) has a R-squared of 4.7 with a Mean Return of 0.12 and a Treynor Ratio of 10.8. Its Beta is 0.08 while MINT’s Standard Deviation is 1.08. Furthermore, the fund has a Sharpe Ratio of 0.78 and a Alpha of 0.62.

LQD’s Mean Return is 0.35 points higher than that of MINT and its R-squared is 62.23 points higher. With a Standard Deviation of 5.94, LQD is slightly more volatile than MINT. The Alpha and Beta of LQD are 0.10 points lower and 1.54 points higher than MINT’s Alpha and Beta.

Performance

Annual Returns

LQD vs. MINT - Annual Returns

Year LQD MINT
2020 11.14% 1.63%
2019 17.13% 3.3%
2018 -3.76% 1.72%
2017 7.16% 1.9%
2016 5.97% 1.99%
2015 -1.08% 0.52%
2014 8.57% 0.53%
2013 -2.49% 0.72%
2012 11.68% 2.48%
2011 8.89% 0.42%
2010 9.15% 1.72%

LQD had its best year in 2019 with an annual return of 17.13%. LQD’s worst year over the past decade yielded -3.76% and occurred in 2018. In most years the iShares iBoxx $ Investment Grade Corporate Bond ETF provided moderate returns such as in 2017, 2014, and 2011 where annual returns amounted to 7.16%, 8.57%, and 8.89% respectively.

The year 2019 was the strongest year for MINT, returning 3.3% on an annual basis. The poorest year for MINT in the last ten years was 2011, with a yield of 0.42%. Most years the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund has given investors modest returns, such as in 2020, 2018, and 2010, when gains were 1.63%, 1.72%, and 1.72% respectively.

Portfolio Growth

LQD vs. MINT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
LQD $10,000 $18,118 6.58%
MINT $10,000 $11,624 1.52%

A $10,000 investment in LQD would have resulted in a final balance of $18,118. This is a profit of $8,118 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.58%.

With a $10,000 investment in MINT, the end total would have been $11,624. This equates to a $1,624 profit over 10 years and a compound annual growth rate (CAGR) of 1.52%.

LQD’s CAGR is 5.06 percentage points higher than that of MINT and as a result, would have yielded $6,494 more on a $10,000 investment. Thus, LQD outperformed MINT by 5.06% annually.


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