The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between BNDX and EMB? And which fund is better?
The expense ratio of BNDX is 0.31 percentage points lower than EMB’s (0.08% vs. 0.39%). BNDX is mostly comprised of A bonds and EMB has a high exposure to BBB bond. Overall, BNDX has provided lower returns than EMB over the past ten years.
In this article, we’ll compare BNDX vs. EMB. We’ll look at annual returns and risk metrics, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss BNDX’s and EMB’s holdings, performance, and portfolio growth and examine how these affect their overall returns.
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|Name||Vanguard Total International Bond Index Fund ETF Shares||iShares J.P. Morgan USD Emerging Markets Bond ETF|
|Category||N/A||Emerging Markets Bond|
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.
BNDX’s dividend yield is 2.91% lower than that of EMB (0.94% vs. 3.85%). Also, BNDX yielded on average 1.81% less per year over the past decade (4.63% vs. 6.43%). The expense ratio of BNDX is 0.31 percentage points lower than EMB’s (0.08% vs. 0.39%).
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|BNDX Bond Sectors||Weight|
BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.
|EMB Bond Sectors||Weight|
EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Sharpe Ratio of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its R-squared is 0 while BNDX’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a Standard Deviation of 0.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a Standard Deviation of 8.44 with a Treynor Ratio of 3.24 and a Mean Return of 0.44. Its Sharpe Ratio is 0.55 while EMB’s Alpha is 0.89. Furthermore, the fund has a Beta of 1.36 and a R-squared of 23.34.
BNDX’s Mean Return is 0.44 points lower than that of EMB and its R-squared is 23.34 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than EMB. The Alpha and Beta of BNDX are 0.89 points lower and 1.36 points lower than EMB’s Alpha and Beta.
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BNDX had its best year in 2014 with an annual return of 8.83%. BNDX’s worst year over the past decade yielded 0.0% and occurred in 2013. In most years the Vanguard Total International Bond Index Fund ETF Shares provided moderate returns such as in 2015, 2017, and 2018 where annual returns amounted to 1.08%, 2.4%, and 2.94% respectively.
The year 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in BNDX would have resulted in a final balance of $13,695. This is a profit of $3,695 over 7 years and amounts to a compound annual growth rate (CAGR) of 4.63%.
With a $10,000 investment in EMB, the end total would have been $14,825. This equates to a $4,825 profit over 7 years and a compound annual growth rate (CAGR) of 6.43%.
BNDX’s CAGR is 1.81 percentage points lower than that of EMB and as a result, would have yielded $1,130 less on a $10,000 investment. Thus, BNDX performed worse than EMB by 1.81% annually.
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