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BNDX vs. IWN: What’s The Difference?

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and IWN is a iShares Small Value fund. So, what’s the difference between BNDX and IWN? And which fund is better?

The expense ratio of BNDX is 0.16 percentage points lower than IWN’s (0.08% vs. 0.24%). BNDX is mostly comprised of A bonds while IWN has a high exposure to the financial services sector. Overall, BNDX has provided lower returns than IWN over the past ten years.

In this article, we’ll compare BNDX vs. IWN. We’ll look at risk metrics and fund composition, as well as at their performance and portfolio growth. Moreover, I’ll also discuss BNDX’s and IWN’s industry exposure, annual returns, and holdings and examine how these affect their overall returns.

Introduction To Mutual Funds
Introduction To Mutual Funds
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Summary

BNDXIWN
NameVanguard Total International Bond Index Fund ETF SharesiShares Russell 2000 Value ETF
CategoryN/ASmall Value
IssuerVanguardiShares
AUM116.41B15.48B
Avg. Return4.63%10.96%
Div. Yield0.94%1.26%
Expense Ratio0.08%0.24%

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 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.

BNDX’s dividend yield is 0.32% lower than that of IWN (0.94% vs. 1.26%). Also, BNDX yielded on average 6.33% less per year over the past decade (4.63% vs. 10.96%). The expense ratio of BNDX is 0.16 percentage points lower than IWN’s (0.08% vs. 0.24%).

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Fund Composition

Holdings

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

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.

IWN - Holdings

IWN HoldingsWeight
AMC Entertainment Holdings Inc Class A1.06%
Tenet Healthcare Corp0.47%
Stag Industrial Inc0.47%
Ovintiv Inc0.45%
EMCOR Group Inc0.42%
Valley National Bancorp0.37%
Chesapeake Energy Corp Ordinary Shares – New0.37%
Agree Realty Corp0.36%
Macy’s Inc0.35%
Essent Group Ltd0.35%

IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.

Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.

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Risk Analysis

BNDXIWN
Mean Return01.01
R-squared072.64
Std. Deviation019.28
Alpha0-6.32
Beta01.21
Sharpe Ratio00.59
Treynor Ratio08.3

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a R-squared of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Alpha is 0 while BNDX’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Treynor Ratio of 0.

The iShares Russell 2000 Value ETF (IWN) has a R-squared of 72.64 with a Sharpe Ratio of 0.59 and a Mean Return of 1.01. Its Treynor Ratio is 8.3 while IWN’s Beta is 1.21. Furthermore, the fund has a Standard Deviation of 19.28 and a Alpha of -6.32.

BNDX’s Mean Return is 1.01 points lower than that of IWN and its R-squared is 72.64 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than IWN. The Alpha and Beta of BNDX are 6.32 points higher and 1.21 points lower than IWN’s Alpha and Beta.

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Performance

Annual Returns

BNDX vs. IWN - Annual Returns

YearBNDXIWN
20204.6%4.5%
20197.88%22.17%
20182.94%-12.94%
20172.4%7.73%
20164.67%31.64%
20151.08%-7.53%
20148.83%4.13%
20130.0%34.3%
20120.0%17.92%
20110.0%-5.64%
20100.0%24.29%

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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.

Portfolio Growth

BNDX vs. IWN - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BNDX$10,000$13,6954.63%
IWN$10,000$15,17710.96%

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 IWN, the end total would have been $15,177. This equates to a $5,177 profit over 7 years and a compound annual growth rate (CAGR) of 10.96%.

BNDX’s CAGR is 6.33 percentage points lower than that of IWN and as a result, would have yielded $1,482 less on a $10,000 investment. Thus, BNDX performed worse than IWN by 6.33% annually.


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