The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares Russell 1000 ETF (IWB) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and IWB is a iShares Large Blend fund. So, what’s the difference between BNDX and IWB? And which fund is better?
The expense ratio of BNDX is 0.07 percentage points lower than IWB’s (0.08% vs. 0.15%). BNDX is mostly comprised of A bonds while IWB has a high exposure to the technology sector. Overall, BNDX has provided lower returns than IWB over the past ten years.
In this article, we’ll compare BNDX vs. IWB. We’ll look at annual returns and performance, as well as at their holdings and risk metrics. Moreover, I’ll also discuss BNDX’s and IWB’s portfolio growth, industry exposure, and fund composition and examine how these affect their overall returns.
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Summary
| BNDX | IWB | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | iShares Russell 1000 ETF |
| Category | N/A | Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 116.41B | 30.54B |
| Avg. Return | 4.63% | 14.64% |
| Div. Yield | 0.94% | 1.14% |
| Expense Ratio | 0.08% | 0.15% |
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 Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.
BNDX’s dividend yield is 0.20% lower than that of IWB (0.94% vs. 1.14%). Also, BNDX yielded on average 10.01% less per year over the past decade (4.63% vs. 14.64%). The expense ratio of BNDX is 0.07 percentage points lower than IWB’s (0.08% vs. 0.15%).
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Fund Composition
Holdings
| BNDX Bond Sectors | Weight |
| A | 29.19% |
| AA | 26.79% |
| AAA | 21.59% |
| BBB | 19.41% |
| Others | 1.57% |
| Below B | 1.45% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
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.
| IWB Holdings | Weight |
| Apple Inc | 5.45% |
| Microsoft Corp | 5.11% |
| Amazon.com Inc | 3.43% |
| Facebook Inc Class A | 2.03% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.82% |
| Tesla Inc | 1.27% |
| Berkshire Hathaway Inc Class B | 1.24% |
| NVIDIA Corp | 1.11% |
| JPMorgan Chase & Co | 1.09% |
IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.
Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.
Risk Analysis
| BNDX | IWB | |
| Mean Return | 0 | 1.27 |
| R-squared | 0 | 99.73 |
| Std. Deviation | 0 | 13.87 |
| Alpha | 0 | -0.38 |
| Beta | 0 | 1.02 |
| Sharpe Ratio | 0 | 1.05 |
| Treynor Ratio | 0 | 14.31 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Beta of 0 with a R-squared of 0 and a Mean Return of 0. Its Standard Deviation is 0 while BNDX’s Alpha is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.
The iShares Russell 1000 ETF (IWB) has a Standard Deviation of 13.87 with a Treynor Ratio of 14.31 and a R-squared of 99.73. Its Alpha is -0.38 while IWB’s Mean Return is 1.27. Furthermore, the fund has a Beta of 1.02 and a Sharpe Ratio of 1.05.
BNDX’s Mean Return is 1.27 points lower than that of IWB and its R-squared is 99.73 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than IWB. The Alpha and Beta of BNDX are 0.38 points higher and 1.02 points lower than IWB’s Alpha and Beta.
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Performance
Annual Returns
| Year | BNDX | IWB |
| 2020 | 4.6% | 20.8% |
| 2019 | 7.88% | 31.26% |
| 2018 | 2.94% | -4.91% |
| 2017 | 2.4% | 21.53% |
| 2016 | 4.67% | 11.91% |
| 2015 | 1.08% | 0.82% |
| 2014 | 8.83% | 13.08% |
| 2013 | 0.0% | 32.93% |
| 2012 | 0.0% | 16.27% |
| 2011 | 0.0% | 1.36% |
| 2010 | 0.0% | 15.94% |
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 2013 was the strongest year for IWB, returning 32.93% on an annual basis. The poorest year for IWB in the last ten years was 2018, with a yield of -4.91%. Most years the iShares Russell 1000 ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.08%, 15.94%, and 16.27% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| IWB | $10,000 | $23,378 | 14.64% |
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 IWB, the end total would have been $23,378. This equates to a $13,378 profit over 7 years and a compound annual growth rate (CAGR) of 14.64%.
BNDX’s CAGR is 10.01 percentage points lower than that of IWB and as a result, would have yielded $9,683 less on a $10,000 investment. Thus, BNDX performed worse than IWB by 10.01% annually.
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