The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between BNDX and IWS? And which fund is better?
The expense ratio of BNDX is 0.15 percentage points lower than IWS’s (0.08% vs. 0.23%). BNDX is mostly comprised of A bonds while IWS has a high exposure to the financial services sector. Overall, BNDX has provided lower returns than IWS over the past ten years.
In this article, we’ll compare BNDX vs. IWS. We’ll look at portfolio growth and annual returns, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss BNDX’s and IWS’s holdings, performance, and fund composition and examine how these affect their overall returns.
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Summary
| BNDX | IWS | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | iShares Russell Mid-Cap Value ETF |
| Category | N/A | Mid-Cap Value |
| Issuer | Vanguard | iShares |
| AUM | 116.41B | 14.24B |
| Avg. Return | 4.63% | 12.35% |
| Div. Yield | 0.94% | 1.34% |
| Expense Ratio | 0.08% | 0.23% |
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 Mid-Cap Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
BNDX’s dividend yield is 0.40% lower than that of IWS (0.94% vs. 1.34%). Also, BNDX yielded on average 7.72% less per year over the past decade (4.63% vs. 12.35%). The expense ratio of BNDX is 0.15 percentage points lower than IWS’s (0.08% vs. 0.23%).
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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.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
Risk Analysis
| BNDX | IWS | |
| Mean Return | 0 | 1.06 |
| R-squared | 0 | 87.04 |
| Std. Deviation | 0 | 16.03 |
| Alpha | 0 | -4.11 |
| Beta | 0 | 1.1 |
| Sharpe Ratio | 0 | 0.75 |
| Treynor Ratio | 0 | 10.3 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Mean Return of 0. Its Alpha is 0 while BNDX’s Sharpe Ratio is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.
The iShares Russell Mid-Cap Value ETF (IWS) has a Beta of 1.1 with a Mean Return of 1.06 and a R-squared of 87.04. Its Alpha is -4.11 while IWS’s Treynor Ratio is 10.3. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Standard Deviation of 16.03.
BNDX’s Mean Return is 1.06 points lower than that of IWS and its R-squared is 87.04 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than IWS. The Alpha and Beta of BNDX are 4.11 points higher and 1.10 points lower than IWS’s Alpha and Beta.
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Performance
Annual Returns
| Year | BNDX | IWS |
| 2020 | 4.6% | 4.76% |
| 2019 | 7.88% | 26.78% |
| 2018 | 2.94% | -12.36% |
| 2017 | 2.4% | 13.1% |
| 2016 | 4.67% | 19.69% |
| 2015 | 1.08% | -4.93% |
| 2014 | 8.83% | 14.49% |
| 2013 | 0.0% | 33.11% |
| 2012 | 0.0% | 18.27% |
| 2011 | 0.0% | -1.55% |
| 2010 | 0.0% | 24.46% |
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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| IWS | $10,000 | $17,150 | 12.35% |
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 IWS, the end total would have been $17,150. This equates to a $7,150 profit over 7 years and a compound annual growth rate (CAGR) of 12.35%.
BNDX’s CAGR is 7.72 percentage points lower than that of IWS and as a result, would have yielded $3,455 less on a $10,000 investment. Thus, BNDX performed worse than IWS by 7.72% annually.
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