The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares U.S. Treasury Bond ETF (GOVT) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and GOVT is a iShares Intermediate Government fund. So, what’s the difference between BNDX and GOVT? And which fund is better?
The expense ratio of BNDX is 0.03 percentage points higher than GOVT’s (0.08% vs. 0.05%). BNDX is mostly comprised of A bonds and GOVT has a high exposure to AAA bond. Overall, BNDX has provided higher returns than GOVT over the past ten years.
In this article, we’ll compare BNDX vs. GOVT. We’ll look at industry exposure and portfolio growth, as well as at their annual returns and holdings. Moreover, I’ll also discuss BNDX’s and GOVT’s fund composition, risk metrics, and performance and examine how these affect their overall returns.
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|Name||Vanguard Total International Bond Index Fund ETF Shares||iShares U.S. Treasury Bond ETF|
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 U.S. Treasury Bond ETF (GOVT) is a Intermediate Government fund that is issued by iShares. It currently has 17.07B total assets under management and has yielded an average annual return of 2.67% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.05%.
BNDX’s dividend yield is 0.06% lower than that of GOVT (0.94% vs. 1.0%). Also, BNDX yielded on average 1.95% more per year over the past decade (4.63% vs. 2.67%). The expense ratio of BNDX is 0.03 percentage points higher than GOVT’s (0.08% vs. 0.05%).
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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.
|GOVT Bond Sectors||Weight|
GOVT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a R-squared of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while BNDX’s Alpha is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Standard Deviation of 0.
The iShares U.S. Treasury Bond ETF (GOVT) has a Beta of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Treynor Ratio is 0 while GOVT’s Mean Return is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Alpha of 0.
BNDX’s Mean Return is 0.00 points lower than that of GOVT and its R-squared is 0.00 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than GOVT. The Alpha and Beta of BNDX are 0.00 points lower and 0.00 points lower than GOVT’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 2020 was the strongest year for GOVT, returning 7.92% on an annual basis. The poorest year for GOVT in the last ten years was 2013, with a yield of -2.84%. Most years the iShares U.S. Treasury Bond ETF has given investors modest returns, such as in 2018, 2015, and 2016, when gains were 0.74%, 0.76%, and 0.92% 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 GOVT, the end total would have been $12,656. This equates to a $2,656 profit over 7 years and a compound annual growth rate (CAGR) of 2.67%.
BNDX’s CAGR is 1.95 percentage points higher than that of GOVT and as a result, would have yielded $1,039 more on a $10,000 investment. Thus, BNDX outperformed GOVT by 1.95% annually.
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