IG vs MFEM
Principal Investment Grade Corporate ETF vs PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF
Quick Verdict
IG has a lower expense ratio. MFEM delivered stronger 1-year returns. MFEM offers more diversification with 704 holdings.
Side-by-Side Comparison
| Metric | IG | MFEM | Winner |
|---|---|---|---|
| Expense Ratio | 0.19% | 0.49% | |
| AUM | $198M | $142M | |
| Dividend Yield | 5.07% | 2.14% | |
| Holdings | 248 | 730 | |
| YTD Return | -1.76% | +21.89% | |
| 1Y Return | +0.69% | +33.23% | |
| 3Y Return (annualized) | +4.77% | +20.02% | |
| 5Y Return (annualized) | -0.76% | +8.45% | |
| Volatility (annualized) | 8.0% | 17.7% | |
| Max Drawdown | -23.8% | -45.3% | |
| Fund Family | Principal Funds | PIMCO (US) | |
| Category | Fixed Income | Equity | |
| Inception | Apr 18, 2018 | Aug 31, 2017 |
IG vs MFEM Performance
Principal Investment Grade Corporate ETF (IG) is a ETF from Principal Funds and PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (MFEM) is a ETF from PIMCO (US). Over the past year IG returned +0.69% while MFEM returned +33.23%. Year to date, IG is down 1.76% versus a gain of 21.89% for MFEM.
Over three years, IG compounded at +4.77% per year against +20.02% for MFEM; over five years the annualized figures are -0.76% and +8.45% respectively. Across the full 8-year window we track, MFEM has the edge at +6.87% annualized vs +0.56%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
MFEM has been the more volatile fund, with annualized monthly volatility of 17.7% compared with 8.0% for IG. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -23.8% for IG and -45.3% for MFEM. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IG charges 0.19% per year while MFEM charges 0.49%. On a $10,000 position that is $19 vs $49 annually, a gap of $30 per year that compounds over a long holding period. On income, IG currently yields 5.07% against 2.14% for MFEM.
Holdings Overlap
IG and MFEM share 0 holdings out of 849 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IG or MFEM?
IG has an expense ratio of 0.19% while MFEM charges 0.49%. IG is the cheaper option. On a $10,000 investment, that is $30 per year of difference.
Which performed better, IG or MFEM?
Over the past year IG returned +0.69% vs +33.23% for MFEM, so MFEM leads on 1-year performance. Over the longest common window we track (8 years), IG annualized +0.56% vs +6.87% for MFEM. Past performance does not guarantee future results.
Which is riskier, IG or MFEM?
MFEM has been the more volatile fund at 17.7% annualized versus 8.0% for IG. Worst drawdown: IG -23.8% vs MFEM -45.3%.
Should I hold both IG and MFEM?
IG and MFEM have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IG and MFEM?
IG and MFEM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 849 unique securities.
Which pays a higher dividend, IG or MFEM?
IG yields 5.07% while MFEM yields 2.14%, so IG currently pays the higher dividend yield.
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