The Vanguard Total Bond Market Index Fund ETF Shares (BND) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. BND is a Vanguard Intermediate-Term Bond fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between BND and VBK? And which fund is better?
The expense ratio of BND is 0.04 percentage points lower than VBK’s (0.03% vs. 0.07%). BND is mostly comprised of AAA bonds while VBK has a high exposure to the technology sector. Overall, BND has provided lower returns than VBK over the past ten years.
In this article, we’ll compare BND vs. VBK. We’ll look at portfolio growth and holdings, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss BND’s and VBK’s performance, annual returns, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard Total Bond Market Index Fund ETF Shares||Vanguard Small-Cap Growth Index Fund ETF Shares|
|Category||Intermediate-Term Bond||Small Growth|
The Vanguard Total Bond Market Index Fund ETF Shares (BND) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 312.15B total assets under management and has yielded an average annual return of 4.09% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.03%.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.
BND’s dividend yield is 1.57% higher than that of VBK (2.02% vs. 0.45%). Also, BND yielded on average 12.43% less per year over the past decade (4.09% vs. 16.53%). The expense ratio of BND is 0.04 percentage points lower than VBK’s (0.03% vs. 0.07%).
|BND Bond Sectors||Weight|
BND’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Below B at 68.72%, 16.17%, 11.87%, 3.34%, and 0.01%. The fund is less weighted towards B (0.0%), BB (0.0%), and US Government (0.0%) rated bonds.
|Charles River Laboratories International Inc||0.78%|
|Fair Isaac Corp||0.57%|
|Bill.com Holdings Inc Ordinary Shares||0.56%|
VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.
Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.
The Vanguard Total Bond Market Index Fund ETF Shares (BND) has a Beta of 1.04 with a Treynor Ratio of 2.64 and a Mean Return of 0.28. Its Sharpe Ratio is 0.88 while BND’s Alpha is -0.14. Furthermore, the fund has a R-squared of 99.34 and a Standard Deviation of 3.14.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Standard Deviation of 17.95 with a R-squared of 80.56 and a Mean Return of 1.22. Its Beta is 1.18 while VBK’s Alpha is -2.81. Furthermore, the fund has a Treynor Ratio of 11.18 and a Sharpe Ratio of 0.78.
BND’s Mean Return is 0.94 points lower than that of VBK and its R-squared is 18.78 points higher. With a Standard Deviation of 3.14, BND is slightly less volatile than VBK. The Alpha and Beta of BND are 2.67 points higher and 0.14 points lower than VBK’s Alpha and Beta.
BND had its best year in 2019 with an annual return of 8.71%. BND’s worst year over the past decade yielded -2.14% and occurred in 2013. In most years the Vanguard Total Bond Market Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2014 where annual returns amounted to 3.62%, 4.04%, and 5.96% respectively.
The year 2013 was the strongest year for VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in BND would have resulted in a final balance of $15,456. This is a profit of $5,456 over 11 years and amounts to a compound annual growth rate (CAGR) of 4.09%.
With a $10,000 investment in VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.
BND’s CAGR is 12.43 percentage points lower than that of VBK and as a result, would have yielded $33,183 less on a $10,000 investment. Thus, BND performed worse than VBK by 12.43% annually.
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