PABD vs. LCTU

Last updated Jun 16, 2026

PABD (iShares Paris-Aligned Climate MSCI World Ex USA ETF) and LCTU (BlackRock U.S. Carbon Transition Readiness ETF) are both exchange-traded funds - PABD is a Foreign Large Cap Equities fund tracking the MSCI World ex USA Climate Paris Aligned Benchmark Extended Select Index - Benchmark TR Net, while LCTU is a ESG fund actively managed by BlackRock. PABD is passively managed, while LCTU is actively managed. Over the past year, PABD returned 20.80% vs 25.98% for LCTU. A 0.72 correlation means they provide meaningful diversification when combined. PABD charges 0.12%/yr vs 0.15%/yr for LCTU.

Performance

PABD vs. LCTU - Performance Comparison

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

Returns By Period

In the year-to-date period, PABD achieves a 8.37% return, which is significantly lower than LCTU's 9.23% return.

PABD

• 1D: 0.75%
• 1M: 4.79%
• YTD: 8.37%
• 6M: 9.38%
• 1Y: 20.80%
• 3Y*: —
• 5Y*: —
• 10Y*: —

LCTU

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

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

PABD vs. LCTU - Yearly Performance Comparison

	2026 (YTD)	2025	2024
PABD iShares Paris-Aligned Climate MSCI World Ex USA ETF	8.37%	30.06%	5.32%
LCTU BlackRock U.S. Carbon Transition Readiness ETF	9.23%	16.96%	23.70%

Correlation

The correlation between PABD and LCTU is 0.79, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.79
Correlation (All Time) Calculated using the full available price history since Jan 19, 2024	0.72

The correlation between PABD and LCTU has been stable across timeframes, ranging from 0.72 to 0.79 - a consistent structural relationship.

PABD vs. LCTU - Sectors Allocation Comparison

Sectors	PABD	LCTU
Financial Services	29.2%	11.3%
Industrials	15.9%	8.3%
Technology	13.9%	37.8%
Healthcare	11.8%	8.6%
Real Estate	6.1%	2.2%
Basic Materials	5.0%	1.9%
Consumer Defensive	4.8%	4.5%
Consumer Cyclical	4.6%	10.3%
Utilities	4.6%	2.3%
Communication Services	3.3%	9.9%
Energy	0.2%	3.0%

Return for Risk

PABD vs. LCTU — Risk / Return Rank

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

PABD

PABD Risk / Return Rank: 38
PABD Sharpe Ratio Rank: 39
PABD Sortino Ratio Rank: 39
PABD Omega Ratio Rank: 37
PABD Calmar Ratio Rank: 35
PABD Martin Ratio Rank: 41

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

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.

PABD vs. LCTU - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Paris-Aligned Climate MSCI World Ex USA ETF (PABD) and BlackRock U.S. Carbon Transition Readiness ETF (LCTU). 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.

	PABD	LCTU	Difference
Sharpe ratio: Return per unit of total volatility	1.31	2.05	-0.74
Sortino ratio: Return per unit of downside risk	1.91	2.80	-0.89
Omega ratio: Gain probability vs. loss probability	1.23	1.37	-0.13
Calmar ratio: Return relative to maximum drawdown	1.66	2.78	-1.12
Martin ratio: Return relative to average drawdown	6.21	12.10	-5.88

PABD vs. LCTU - Sharpe Ratio Comparison

The current PABD Sharpe Ratio is 1.31, which is lower than the LCTU Sharpe Ratio of 2.05. The chart below compares the historical Sharpe Ratios of PABD and LCTU, 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

PABD vs. LCTU - Drawdown Comparison

The maximum PABD drawdown since its inception was -13.37%, smaller than the maximum LCTU drawdown of -25.93%. Use the drawdown chart below to compare losses from any high point for PABD and LCTU.

Drawdown Indicators

	PABD	LCTU	Difference
Max Drawdown Largest peak-to-trough decline	-13.37%	-25.93%	+12.56%
Max Drawdown (1Y) Largest decline over 1 year	-12.55%	-9.38%	-3.17%
Max Drawdown (3Y) Largest decline over 3 years	—	-19.83%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-25.93%	—
Current Drawdown Current decline from peak	-0.02%	-0.57%	+0.55%
Average Drawdown Average peak-to-trough decline	-2.62%	-6.29%	+3.67%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.36%	2.15%	+1.21%

Volatility

PABD vs. LCTU - Volatility Comparison

iShares Paris-Aligned Climate MSCI World Ex USA ETF (PABD) has a higher volatility of 5.54% compared to BlackRock U.S. Carbon Transition Readiness ETF (LCTU) at 4.49%. This indicates that PABD's price experiences larger fluctuations and is considered to be riskier than LCTU based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PABD	LCTU	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.54%	4.49%	+1.05%
Volatility (6M) Calculated over the trailing 6-month period	13.57%	10.05%	+3.52%
Volatility (1Y) Calculated over the trailing 1-year period	16.00%	12.76%	+3.24%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.66%	17.23%	-1.57%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	15.66%	17.04%	-1.38%

PABD vs. LCTU - Expense Ratio Comparison

PABD has a 0.12% expense ratio, which is lower than LCTU's 0.15% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

PABD vs. LCTU - Dividend Comparison

PABD's dividend yield for the trailing twelve months is around 4.03%, more than LCTU's 1.15% 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%
PABD iShares Paris-Aligned Climate MSCI World Ex USA ETF	4.03%	2.74%	2.87%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both PABD and LCTU in my portfolio?

PABD and LCTU have a correlation of 0.79, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PABD or LCTU?

PABD has higher volatility (5.54%) compared to LCTU (4.49%). In terms of maximum drawdown, PABD dropped -13.37% vs LCTU's -25.93%.

Which ETF is better, PABD or LCTU?

On 1-year performance, LCTU leads with 25.98% vs 20.80% for PABD. On fees, PABD is cheaper at 0.12% 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, PABD or LCTU?

Over the 1-year period, LCTU has performed better with a 25.98% return vs 20.80%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PABD or LCTU?

PABD is cheaper with a 0.12% expense ratio, compared with 0.15% for LCTU.

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

PABD has the higher dividend yield at 4.03%, compared with 1.15% for LCTU.

What is the main difference between PABD and LCTU?

PABD is categorized as Foreign Large Cap Equities, while LCTU is ESG. They also come from different issuers: iShares and BlackRock. Their fees differ too: 0.12% for PABD and 0.15% for LCTU.

Which has better risk-adjusted returns?

LCTU currently has the higher Sharpe Ratio (2.05 vs 1.31), 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.