The iShares MSCI USA Quality Factor ETF (QUAL) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. QUAL is a iShares Large Blend fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between QUAL and JPST? And which fund is better?
The expense ratio of QUAL is 0.03 percentage points lower than JPST’s (0.15% vs. 0.18%). QUAL also has a high exposure to the technology sector while JPST is mostly comprised of A bonds. Overall, QUAL has provided higher returns than JPST over the past 3 years.
In this article, we’ll compare QUAL vs. JPST. We’ll look at fund composition and performance, as well as at their holdings and risk metrics. Moreover, I’ll also discuss QUAL’s and JPST’s industry exposure, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| QUAL | JPST | |
| Name | iShares MSCI USA Quality Factor ETF | JPMorgan Ultra-Short Income ETF |
| Category | Large Blend | Ultrashort Bond |
| Issuer | iShares | JPMorgan |
| AUM | 23.93B | 17.32B |
| Avg. Return | 13.42% | 2.57% |
| Div. Yield | 1.29% | 0.94% |
| Expense Ratio | 0.15% | 0.18% |
The iShares MSCI USA Quality Factor ETF (QUAL) is a Large Blend fund that is issued by iShares. It currently has 23.93B total assets under management and has yielded an average annual return of 13.42% over the past 10 years. The fund has a dividend yield of 1.29% with an expense ratio of 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%.
QUAL’s dividend yield is 0.35% higher than that of JPST (1.29% vs. 0.94%). Also, QUAL yielded on average 10.85% more per year over the past decade (13.42% vs. 2.57%). The expense ratio of QUAL is 0.03 percentage points lower than JPST’s (0.15% vs. 0.18%).
Fund Composition
Holdings
| QUAL Holdings | Weight |
| Facebook Inc Class A | 4.77% |
| Nike Inc Class B | 4.05% |
| Microsoft Corp | 3.54% |
| Apple Inc | 3.52% |
| Johnson & Johnson | 2.99% |
| BlackRock Inc | 2.87% |
| Target Corp | 2.8% |
| Mastercard Inc Class A | 2.72% |
| NVIDIA Corp | 2.71% |
| Alphabet Inc Class A | 2.49% |
QUAL’s Top Holdings are Facebook Inc Class A, Nike Inc Class B, Microsoft Corp, Apple Inc, and Johnson & Johnson at 4.77%, 4.05%, 3.54%, 3.52%, and 2.99%.
BlackRock Inc (2.87%), Target Corp (2.8%), and Mastercard Inc Class A (2.72%) have a slightly smaller but still significant weight. NVIDIA Corp and Alphabet Inc Class A are also represented in the QUAL’s holdings at 2.71% and 2.49%.
| 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.
Risk Analysis
| QUAL | JPST | |
| Mean Return | 0 | 0 |
| R-squared | 0 | 0 |
| Std. Deviation | 0 | 0 |
| Alpha | 0 | 0 |
| Beta | 0 | 0 |
| Sharpe Ratio | 0 | 0 |
| Treynor Ratio | 0 | 0 |
The iShares MSCI USA Quality Factor ETF (QUAL) has a Treynor Ratio of 0 with a R-squared of 0 and a Standard Deviation of 0. Its Alpha is 0 while QUAL’s Sharpe Ratio is 0. Furthermore, the fund has a Beta of 0 and a Mean Return of 0.
The JPMorgan Ultra-Short Income ETF (JPST) has a Sharpe Ratio of 0 with a Beta of 0 and a Standard Deviation of 0. Its R-squared is 0 while JPST’s Alpha is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Mean Return of 0.
QUAL’s Mean Return is 0.00 points lower than that of JPST and its R-squared is 0.00 points lower. With a Standard Deviation of 0, QUAL is slightly less volatile than JPST. The Alpha and Beta of QUAL are 0.00 points lower and 0.00 points lower than JPST’s Alpha and Beta.
Performance
Annual Returns
| Year | QUAL | JPST |
| 2020 | 16.96% | 2.17% |
| 2019 | 34.14% | 3.36% |
| 2018 | -5.77% | 2.19% |
| 2017 | 22.26% | 0.0% |
| 2016 | 9.18% | 0.0% |
| 2015 | 5.56% | 0.0% |
| 2014 | 11.62% | 0.0% |
| 2013 | 0.0% | 0.0% |
| 2012 | 0.0% | 0.0% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 0.0% |
QUAL had its best year in 2019 with an annual return of 34.14%. QUAL’s worst year over the past decade yielded -5.77% and occurred in 2018. In most years the iShares MSCI USA Quality Factor ETF provided moderate returns such as in 2010, 2015, and 2016 where annual returns amounted to 0.0%, 5.56%, and 9.18% respectively.
The year 2019 was the strongest year for JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| QUAL | $10,000 | $14,783 | 13.42% |
| JPST | $10,000 | $10,791 | 2.57% |
A $10,000 investment in QUAL would have resulted in a final balance of $14,783. This is a profit of $4,783 over 3 years and amounts to a compound annual growth rate (CAGR) of 13.42%.
With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.
QUAL’s CAGR is 10.85 percentage points higher than that of JPST and as a result, would have yielded $3,992 more on a $10,000 investment. Thus, QUAL outperformed JPST by 10.85% annually.
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