LCTU vs. PABU

Last updated Jun 16, 2026

LCTU (BlackRock U.S. Carbon Transition Readiness ETF) and PABU (iShares Paris-Aligned Climate Optimized MSCI USA ETF) are both exchange-traded funds - LCTU is a ESG fund actively managed by BlackRock, while PABU is a Large Cap Blend Equities fund tracking the MSCI USA Climate Paris Aligned Benchmark Extended Select PAB Index (USD). LCTU is actively managed, while PABU is passively managed. Over the past 3 years, LCTU returned 19.96%/yr vs 18.02%/yr for PABU. Their correlation of 0.93 suggests significant overlap in exposure. LCTU charges 0.15%/yr vs 0.10%/yr for PABU.

Performance

LCTU vs. PABU - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in BlackRock U.S. Carbon Transition Readiness ETF (LCTU) and iShares Paris-Aligned Climate Optimized MSCI USA ETF (PABU). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, LCTU achieves a 9.23% return, which is significantly higher than PABU's 6.81% return.

LCTU

• 1D: 1.73%
• 1M: 2.67%
• YTD: 9.23%
• 6M: 9.49%
• 1Y: 25.98%
• 3Y*: 19.96%
• 5Y*: 12.39%
• 10Y*: —

PABU

• 1D: 1.98%
• 1M: 1.91%
• YTD: 6.81%
• 6M: 7.83%
• 1Y: 20.95%
• 3Y*: 18.02%
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

LCTU vs. PABU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022
LCTU BlackRock U.S. Carbon Transition Readiness ETF	9.23%	16.96%	24.00%	25.38%	-14.78%
PABU iShares Paris-Aligned Climate Optimized MSCI USA ETF	6.81%	13.08%	24.84%	29.51%	-15.45%

Correlation

The correlation between LCTU and PABU is 0.95 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.95
Correlation (3Y) Calculated over the trailing 3-year period	0.96
Correlation (All Time) Calculated using the full available price history since Feb 11, 2022	0.93

The correlation between LCTU and PABU has been stable across timeframes, ranging from 0.93 to 0.96 - a consistent structural relationship.

LCTU vs. PABU - Sectors Allocation Comparison

Sectors	LCTU	PABU
Technology	37.8%	52.1%
Financial Services	11.3%	6.8%
Consumer Cyclical	10.3%	6.0%
Communication Services	9.9%	8.4%
Healthcare	8.6%	5.7%
Industrials	8.3%	1.6%
Consumer Defensive	4.5%	-
Energy	3.0%	0.9%
Utilities	2.3%	1.6%
Real Estate	2.2%	16.6%
Basic Materials	1.9%	0.5%

Return for Risk

LCTU vs. PABU — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

LCTU

LCTU Risk / Return Rank: 66
LCTU Sharpe Ratio Rank: 67
LCTU Sortino Ratio Rank: 65
LCTU Omega Ratio Rank: 66
LCTU Calmar Ratio Rank: 60
LCTU Martin Ratio Rank: 70

PABU

PABU Risk / Return Rank: 40
PABU Sharpe Ratio Rank: 45
PABU Sortino Ratio Rank: 43
PABU Omega Ratio Rank: 44
PABU Calmar Ratio Rank: 33
PABU Martin Ratio Rank: 37

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

LCTU vs. PABU - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for BlackRock U.S. Carbon Transition Readiness ETF (LCTU) and iShares Paris-Aligned Climate Optimized MSCI USA ETF (PABU). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	LCTU	PABU	Difference
Sharpe ratio: Return per unit of total volatility	2.05	1.50	+0.55
Sortino ratio: Return per unit of downside risk	2.80	2.05	+0.74
Omega ratio: Gain probability vs. loss probability	1.37	1.27	+0.10
Calmar ratio: Return relative to maximum drawdown	2.78	1.57	+1.21
Martin ratio: Return relative to average drawdown	12.10	5.37	+6.72

LCTU vs. PABU - Sharpe Ratio Comparison

The current LCTU Sharpe Ratio is 2.05, which is higher than the PABU Sharpe Ratio of 1.50. The chart below compares the historical Sharpe Ratios of LCTU and PABU, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

LCTU vs. PABU - Drawdown Comparison

The maximum LCTU drawdown since its inception was -25.93%, which is greater than PABU's maximum drawdown of -22.76%. Use the drawdown chart below to compare losses from any high point for LCTU and PABU.

Drawdown Indicators

	LCTU	PABU	Difference
Max Drawdown Largest peak-to-trough decline	-25.93%	-22.76%	-3.17%
Max Drawdown (1Y) Largest decline over 1 year	-9.38%	-13.40%	+4.02%
Max Drawdown (3Y) Largest decline over 3 years	-19.83%	-20.85%	+1.02%
Max Drawdown (5Y) Largest decline over 5 years	-25.93%	—	—
Current Drawdown Current decline from peak	-0.57%	-3.61%	+3.04%
Average Drawdown Average peak-to-trough decline	-6.29%	-5.62%	-0.67%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.15%	3.91%	-1.76%

Volatility

LCTU vs. PABU - Volatility Comparison

The current volatility for BlackRock U.S. Carbon Transition Readiness ETF (LCTU) is 4.49%, while iShares Paris-Aligned Climate Optimized MSCI USA ETF (PABU) has a volatility of 5.97%. This indicates that LCTU experiences smaller price fluctuations and is considered to be less risky than PABU based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	LCTU	PABU	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.49%	5.97%	-1.48%
Volatility (6M) Calculated over the trailing 6-month period	10.05%	11.32%	-1.27%
Volatility (1Y) Calculated over the trailing 1-year period	12.76%	14.06%	-1.30%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.23%	18.76%	-1.53%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.04%	18.76%	-1.72%

LCTU vs. PABU - Expense Ratio Comparison

LCTU has a 0.15% expense ratio, which is higher than PABU's 0.10% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

LCTU vs. PABU - Dividend Comparison

LCTU's dividend yield for the trailing twelve months is around 1.15%, more than PABU's 1.09% yield.

Position	TTM	2025	2024	2023	2022	2021
LCTU BlackRock U.S. Carbon Transition Readiness ETF	1.15%	1.02%	1.27%	1.46%	1.63%	2.20%
PABU iShares Paris-Aligned Climate Optimized MSCI USA ETF	1.09%	0.90%	1.00%	1.06%	1.00%	0.00%

Frequently Asked Questions

Can I hold both LCTU and PABU in my portfolio?

With a correlation of 0.95, LCTU and PABU move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, LCTU or PABU?

PABU has higher volatility (5.97%) compared to LCTU (4.49%). In terms of maximum drawdown, LCTU dropped -25.93% vs PABU's -22.76%.

Which ETF is better, LCTU or PABU?

On 3-year performance, LCTU leads with 19.96% vs 18.02% for PABU. On fees, PABU is cheaper at 0.10% per year. On volatility, LCTU has been the lower-risk option at 4.49%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, LCTU or PABU?

Over the 3-year period, LCTU has performed better with a 19.96% return vs 18.02%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, LCTU or PABU?

PABU is cheaper with a 0.10% expense ratio, compared with 0.15% for LCTU.

Which ETF pays a higher dividend yield, LCTU or PABU?

LCTU has the higher dividend yield at 1.15%, compared with 1.09% for PABU.

What is the main difference between LCTU and PABU?

LCTU is categorized as ESG, while PABU is Large Cap Blend Equities. They also come from different issuers: BlackRock and iShares. Their fees differ too: 0.15% for LCTU and 0.10% for PABU.

Which has better risk-adjusted returns?

LCTU currently has the higher Sharpe Ratio (2.05 vs 1.50), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.