TIP vs. IGSB: What's The Difference?
TIP vs. IGSB: What’s The Difference?
The iShares TIPS Bond ETF (TIP) and the iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) are both among the Top 100 ETFs. TIP is a iShares Inflation-Protected Bond fund and IGSB is a iShares Short-Term Bond fund. So, what’s the difference between TIP and IGSB? And which fund is better?
The expense ratio of TIP is 0.13 percentage points higher than IGSB’s (0.19% vs. 0.06%). TIP is mostly comprised of AAA bonds and IGSB has a high exposure to BBB bond. Overall, TIP has provided higher returns than IGSB over the past ten years.
In this article, we’ll compare TIP vs. IGSB. We’ll look at fund composition and holdings, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss TIP’s and IGSB’s performance, annual returns, and portfolio growth and examine how these affect their overall returns.
TIP IGSB
Name iShares TIPS Bond ETF iShares 1-5 Year Investment Grade Corporate Bond ETF
Category Inflation-Protected Bond Short-Term Bond
TIP’s dividend yield is 0.15% lower than that of IGSB (1.87% vs. 2.02%). Also, TIP yielded on average 1.57% more per year over the past decade (4.07% vs. 2.51%). The expense ratio of TIP is 0.13 percentage points higher than IGSB’s (0.19% vs. 0.06%).
The iShares TIPS Bond ETF (TIP) has a Sharpe Ratio of 0.62 with a Beta of 1.18 and a Standard Deviation of 4.33. Its Treynor Ratio is 2.24 while TIP’s R-squared is 66.57. Furthermore, the fund has a Alpha of -0.58 and a Mean Return of 0.28.
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a R-squared of 26.13 with a Standard Deviation of 2 and a Alpha of 0.69. Its Beta is 0.34 while IGSB’s Mean Return is 0.19. Furthermore, the fund has a Treynor Ratio of 4.82 and a Sharpe Ratio of 0.82.
TIP’s Mean Return is 0.09 points higher than that of IGSB and its R-squared is 40.44 points higher. With a Standard Deviation of 4.33, TIP is slightly more volatile than IGSB. The Alpha and Beta of TIP are 1.27 points lower and 0.84 points higher than IGSB’s Alpha and Beta.
Year TIP IGSB
TIP’s CAGR is 1.57 percentage points higher than that of IGSB and as a result, would have yielded $2,126 more on a $10,000 investment. Thus, TIP outperformed IGSB by 1.57% annually.