PABU vs. LCTU

Last updated Jun 4, 2026

PABU (iShares Paris-Aligned Climate Optimized MSCI USA ETF) and LCTU (BlackRock U.S. Carbon Transition Readiness ETF) are both exchange-traded funds - PABU is a Large Cap Blend Equities fund tracking the MSCI USA Climate Paris Aligned Benchmark Extended Select PAB Index (USD), while LCTU is a ESG fund actively managed by BlackRock. PABU is passively managed, while LCTU is actively managed. Over the past 3 years, PABU returned 20.14%/yr vs 21.17%/yr for LCTU. Their correlation of 0.94 suggests significant overlap in exposure. PABU charges 0.10%/yr vs 0.15%/yr for LCTU.

Performance

PABU vs. LCTU - Performance Comparison

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

Returns By Period

The year-to-date returns for both stocks are quite close, with PABU having a 9.39% return and LCTU slightly lower at 9.04%.

PABU

• 1D: -1.29%
• 1M: 7.47%
• YTD: 9.39%
• 6M: 9.10%
• 1Y: 23.78%
• 3Y*: 20.14%
• 5Y*: —
• 10Y*: —

LCTU

• 1D: -0.74%
• 1M: 5.23%
• YTD: 9.04%
• 6M: 9.21%
• 1Y: 25.72%
• 3Y*: 21.17%
• 5Y*: 12.37%
• 10Y*: —

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

PABU vs. LCTU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022
PABU iShares Paris-Aligned Climate Optimized MSCI USA ETF	9.39%	13.08%	24.84%	29.51%	-15.45%
LCTU BlackRock U.S. Carbon Transition Readiness ETF	9.04%	16.96%	24.00%	25.38%	-13.19%

Correlation

The correlation between PABU and LCTU 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 14, 2022	0.94

The correlation between PABU and LCTU has been stable across timeframes, ranging from 0.94 to 0.96 - a consistent structural relationship.

PABU vs. LCTU - Sectors Allocation Comparison

Sectors	PABU	LCTU
Technology	44.9%	34.6%
Real Estate	12.4%	2.5%
Financial Services	11.2%	12.1%
Communication Services	10.4%	10.3%
Consumer Cyclical	9.0%	10.3%
Healthcare	7.4%	8.8%
Industrials	2.5%	8.7%
Utilities	1.8%	2.5%
Energy	0.7%	3.5%
Basic Materials	0.5%	1.9%
Consumer Defensive	-	4.9%

Return for Risk

PABU vs. LCTU — Risk / Return Rank

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

PABU

PABU Risk / Return Rank: 46
PABU Sharpe Ratio Rank: 52
PABU Sortino Ratio Rank: 51
PABU Omega Ratio Rank: 50
PABU Calmar Ratio Rank: 36
PABU Martin Ratio Rank: 40

LCTU

LCTU Risk / Return Rank: 61
LCTU Sharpe Ratio Rank: 62
LCTU Sortino Ratio Rank: 61
LCTU Omega Ratio Rank: 62
LCTU Calmar Ratio Rank: 55
LCTU Martin Ratio Rank: 67

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.

PABU vs. LCTU - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Paris-Aligned Climate Optimized MSCI USA ETF (PABU) 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.

	PABU	LCTU	Difference
Sharpe ratio: Return per unit of total volatility	1.79	2.10	-0.31
Sortino ratio: Return per unit of downside risk	2.48	2.89	-0.41
Omega ratio: Gain probability vs. loss probability	1.31	1.38	-0.06
Calmar ratio: Return relative to maximum drawdown	1.78	2.75	-0.97
Martin ratio: Return relative to average drawdown	6.25	12.25	-6.00
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

PABU vs. LCTU - Sharpe Ratio Comparison

The current PABU Sharpe Ratio is 1.79, which is comparable to the LCTU Sharpe Ratio of 2.10. The chart below compares the historical Sharpe Ratios of PABU 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.

Sharpe Ratios by Period

	PABU	LCTU	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.79	2.10	-0.31
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	—	0.72	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.73	0.76	-0.03

Drawdowns

PABU vs. LCTU - Drawdown Comparison

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

Drawdown Indicators

	PABU	LCTU	Difference
Max Drawdown Largest peak-to-trough decline	-22.76%	-25.93%	+3.17%
Max Drawdown (1Y) Largest decline over 1 year	-13.40%	-9.38%	-4.02%
Max Drawdown (3Y) Largest decline over 3 years	-20.85%	-19.83%	-1.02%
Max Drawdown (5Y) Largest decline over 5 years	—	-25.93%	—
Current Drawdown Current decline from peak	-1.29%	-0.74%	-0.55%
Average Drawdown Average peak-to-trough decline	-5.63%	-6.32%	+0.69%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.82%	2.11%	+1.71%

Volatility

PABU vs. LCTU - Volatility Comparison

iShares Paris-Aligned Climate Optimized MSCI USA ETF (PABU) has a higher volatility of 3.70% compared to BlackRock U.S. Carbon Transition Readiness ETF (LCTU) at 3.04%. This indicates that PABU'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

	PABU	LCTU	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.70%	3.04%	+0.66%
Volatility (6M) Calculated over the trailing 6-month period	10.24%	9.36%	+0.88%
Volatility (1Y) Calculated over the trailing 1-year period	13.37%	12.30%	+1.07%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.68%	17.15%	+1.53%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.68%	17.02%	+1.66%

PABU vs. LCTU - Expense Ratio Comparison

PABU has a 0.10% 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

PABU vs. LCTU - Dividend Comparison

PABU's dividend yield for the trailing twelve months is around 0.86%, less than LCTU's 0.93% yield.

Position	TTM	2025	2024	2023	2022	2021
LCTU BlackRock U.S. Carbon Transition Readiness ETF	0.93%	1.02%	1.27%	1.46%	1.63%	2.20%
PABU iShares Paris-Aligned Climate Optimized MSCI USA ETF	0.86%	0.90%	1.00%	1.06%	1.00%	0.00%

Frequently Asked Questions

Can I hold both PABU and LCTU in my portfolio?

With a correlation of 0.95, PABU and LCTU 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, PABU or LCTU?

PABU has higher volatility (3.70%) compared to LCTU (3.04%). In terms of maximum drawdown, PABU dropped -22.76% vs LCTU's -25.93%.

Which ETF is better, PABU or LCTU?

On 3-year performance, LCTU leads with 21.17% vs 20.14% for PABU. On fees, PABU is cheaper at 0.10% per year. On volatility, LCTU has been the lower-risk option at 3.04%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PABU or LCTU?

Over the 3-year period, LCTU has performed better with a 21.17% return vs 20.14%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PABU or LCTU?

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

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

LCTU has the higher dividend yield at 0.93%, compared with 0.86% for PABU.

What is the main difference between PABU and LCTU?

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

Which has better risk-adjusted returns?

LCTU currently has the higher Sharpe Ratio (2.10 vs 1.79), 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.