PABU vs. LDEM

Last updated Jun 16, 2026

PABU (iShares Paris-Aligned Climate Optimized MSCI USA ETF) and LDEM (iShares ESG MSCI EM Leaders 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 LDEM is a Emerging Markets Equities fund tracking the MSCI EM Extended ESG Leaders 5% Issuer Capped Index. Both are passively managed. Over the past 3 years, PABU returned 18.02%/yr vs 13.85%/yr for LDEM. A 0.57 correlation means they provide meaningful diversification when combined. PABU charges 0.10%/yr vs 0.16%/yr for LDEM.

Performance

PABU vs. LDEM - 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 iShares ESG MSCI EM Leaders ETF (LDEM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, PABU achieves a 6.81% return, which is significantly lower than LDEM's 8.26% return.

PABU

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

LDEM

• 1D: 2.52%
• 1M: 3.00%
• YTD: 8.26%
• 6M: 9.66%
• 1Y: 24.07%
• 3Y*: 13.85%
• 5Y*: 2.60%
• 10Y*: —

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

PABU vs. LDEM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022
PABU iShares Paris-Aligned Climate Optimized MSCI USA ETF	6.81%	13.08%	24.84%	29.51%	-15.45%
LDEM iShares ESG MSCI EM Leaders ETF	8.26%	32.49%	5.87%	6.49%	-24.00%

Correlation

The correlation between PABU and LDEM is 0.67, 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	0.67
Correlation (3Y) Calculated over the trailing 3-year period	0.57
Correlation (All Time) Calculated using the full available price history since Feb 11, 2022	0.57

The correlation between PABU and LDEM shifts across timeframes, from 0.57 (all time) to 0.67 (1 year), reflecting how their relationship changes across market environments.

PABU vs. LDEM - Sectors Allocation Comparison

Sectors	PABU	LDEM
Technology	52.1%	25.9%
Real Estate	16.6%	1.4%
Communication Services	8.4%	10.6%
Financial Services	6.8%	24.7%
Consumer Cyclical	6.0%	12.6%
Healthcare	5.7%	2.6%
Industrials	1.6%	5.5%
Utilities	1.6%	1.9%
Energy	0.9%	4.2%
Basic Materials	0.5%	6.4%
Consumer Defensive	-	2.9%

Return for Risk

PABU vs. LDEM — Risk / Return Rank

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

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

LDEM

LDEM Risk / Return Rank: 39
LDEM Sharpe Ratio Rank: 38
LDEM Sortino Ratio Rank: 37
LDEM Omega Ratio Rank: 40
LDEM Calmar Ratio Rank: 39
LDEM Martin Ratio Rank: 39

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. LDEM - 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 iShares ESG MSCI EM Leaders ETF (LDEM). 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.

	PABU	LDEM	Difference
Sharpe ratio: Return per unit of total volatility	1.50	1.28	+0.22
Sortino ratio: Return per unit of downside risk	2.05	1.81	+0.24
Omega ratio: Gain probability vs. loss probability	1.27	1.25	+0.02
Calmar ratio: Return relative to maximum drawdown	1.57	1.83	-0.26
Martin ratio: Return relative to average drawdown	5.37	5.76	-0.39

PABU vs. LDEM - Sharpe Ratio Comparison

The current PABU Sharpe Ratio is 1.50, which is comparable to the LDEM Sharpe Ratio of 1.28. The chart below compares the historical Sharpe Ratios of PABU and LDEM, 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

PABU vs. LDEM - Drawdown Comparison

The maximum PABU drawdown since its inception was -22.76%, smaller than the maximum LDEM drawdown of -40.82%. Use the drawdown chart below to compare losses from any high point for PABU and LDEM.

Drawdown Indicators

	PABU	LDEM	Difference
Max Drawdown Largest peak-to-trough decline	-22.76%	-40.82%	+18.06%
Max Drawdown (1Y) Largest decline over 1 year	-13.40%	-13.21%	-0.19%
Max Drawdown (3Y) Largest decline over 3 years	-20.85%	-15.12%	-5.73%
Max Drawdown (5Y) Largest decline over 5 years	—	-39.17%	—
Current Drawdown Current decline from peak	-3.61%	-2.72%	-0.89%
Average Drawdown Average peak-to-trough decline	-5.62%	-17.30%	+11.68%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.91%	4.19%	-0.28%

Volatility

PABU vs. LDEM - Volatility Comparison

The current volatility for iShares Paris-Aligned Climate Optimized MSCI USA ETF (PABU) is 5.97%, while iShares ESG MSCI EM Leaders ETF (LDEM) has a volatility of 8.65%. This indicates that PABU experiences smaller price fluctuations and is considered to be less risky than LDEM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PABU	LDEM	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.97%	8.65%	-2.68%
Volatility (6M) Calculated over the trailing 6-month period	11.32%	15.64%	-4.32%
Volatility (1Y) Calculated over the trailing 1-year period	14.06%	18.96%	-4.90%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.76%	19.34%	-0.58%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.76%	20.87%	-2.11%

PABU vs. LDEM - Expense Ratio Comparison

PABU has a 0.10% expense ratio, which is lower than LDEM's 0.16% 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. LDEM - Dividend Comparison

PABU's dividend yield for the trailing twelve months is around 1.09%, less than LDEM's 3.83% yield.

Position	TTM	2025	2024	2023	2022	2021	2020
LDEM iShares ESG MSCI EM Leaders ETF	3.83%	3.26%	2.64%	3.20%	4.93%	1.82%	1.89%
PABU iShares Paris-Aligned Climate Optimized MSCI USA ETF	1.09%	0.90%	1.00%	1.06%	1.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both PABU and LDEM in my portfolio?

PABU and LDEM have a correlation of 0.67, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PABU or LDEM?

LDEM has higher volatility (8.65%) compared to PABU (5.97%). In terms of maximum drawdown, PABU dropped -22.76% vs LDEM's -40.82%.

Which ETF is better, PABU or LDEM?

On 3-year performance, PABU leads with 18.02% vs 13.85% for LDEM. On fees, PABU is cheaper at 0.10% per year. On volatility, PABU has been the lower-risk option at 5.97%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PABU or LDEM?

Over the 3-year period, PABU has performed better with a 18.02% return vs 13.85%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PABU or LDEM?

PABU is cheaper with a 0.10% expense ratio, compared with 0.16% for LDEM.

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

LDEM has the higher dividend yield at 3.83%, compared with 1.09% for PABU.

What is the main difference between PABU and LDEM?

PABU is categorized as Large Cap Blend Equities, while LDEM is Emerging Markets Equities. PABU tracks MSCI USA Climate Paris Aligned Benchmark Extended Select PAB Index (USD), while LDEM tracks MSCI EM Extended ESG Leaders 5% Issuer Capped Index. Their fees differ too: 0.10% for PABU and 0.16% for LDEM.

Which has better risk-adjusted returns?

PABU currently has the higher Sharpe Ratio (1.50 vs 1.28), 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.