The iShares MSCI USA Quality Factor ETF (QUAL) and the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) are both among the Top 100 ETFs. QUAL is a iShares Large Blend fund and MINT is a PIMCO Ultrashort Bond fund. So, what’s the difference between QUAL and MINT? And which fund is better?
The expense ratio of QUAL is 0.21 percentage points lower than MINT’s (0.15% vs. 0.36%). QUAL also has a high exposure to the technology sector while MINT is mostly comprised of Others bonds. Overall, QUAL has provided higher returns than MINT over the past 7 years.
In this article, we’ll compare QUAL 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 QUAL’s and MINT’s annual returns, performance, and fund composition and examine how these affect their overall returns.
|Name||iShares MSCI USA Quality Factor ETF||PIMCO Enhanced Short Maturity Active Exchange-Traded Fund|
|Category||Large Blend||Ultrashort Bond|
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 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%.
QUAL’s dividend yield is 0.73% higher than that of MINT (1.29% vs. 0.56%). Also, QUAL yielded on average 11.90% more per year over the past decade (13.42% vs. 1.52%). The expense ratio of QUAL is 0.21 percentage points lower than MINT’s (0.15% vs. 0.36%).
|Facebook Inc Class A||4.77%|
|Nike Inc Class B||4.05%|
|Johnson & Johnson||2.99%|
|Mastercard Inc Class A||2.72%|
|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%.
|MINT Bond Sectors||Weight|
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.
The iShares MSCI USA Quality Factor ETF (QUAL) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Beta of 0. Its Sharpe Ratio is 0 while QUAL’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Alpha of 0.
The PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) has a Sharpe Ratio of 0.78 with a Mean Return of 0.12 and a Beta of 0.08. Its R-squared is 4.7 while MINT’s Standard Deviation is 1.08. Furthermore, the fund has a Treynor Ratio of 10.8 and a Alpha of 0.62.
QUAL’s Mean Return is 0.12 points lower than that of MINT and its R-squared is 4.70 points lower. With a Standard Deviation of 0, QUAL is slightly less volatile than MINT. The Alpha and Beta of QUAL are 0.62 points lower and 0.08 points lower than MINT’s Alpha and Beta.
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 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in QUAL would have resulted in a final balance of $23,251. This is a profit of $13,251 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.42%.
With a $10,000 investment in MINT, the end total would have been $11,215. This equates to a $1,215 profit over 7 years and a compound annual growth rate (CAGR) of 1.52%.
QUAL’s CAGR is 11.90 percentage points higher than that of MINT and as a result, would have yielded $12,036 more on a $10,000 investment. Thus, QUAL outperformed MINT by 11.90% annually.
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