The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between BNDX and MDY? And which fund is better?
The expense ratio of BNDX is 0.15 percentage points lower than MDY’s (0.08% vs. 0.23%). BNDX is mostly comprised of A bonds while MDY has a high exposure to the industrials sector. Overall, BNDX has provided lower returns than MDY over the past ten years.
In this article, we’ll compare BNDX vs. MDY. We’ll look at holdings and portfolio growth, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss BNDX’s and MDY’s annual returns, performance, and risk metrics and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
|Name||Vanguard Total International Bond Index Fund ETF Shares||SPDR S&P MIDCAP 400 ETF Trust|
|Issuer||Vanguard||SPDR State Street Global Advisors|
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 SPDR S&P MIDCAP 400 ETF Trust (MDY) is a Mid-Cap Blend fund that is issued by SPDR State Street Global Advisors. It currently has 21.31B total assets under management and has yielded an average annual return of 13.29% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.23%.
BNDX’s dividend yield is 0.00% lower than that of MDY (0.94% vs. 0.94%). Also, BNDX yielded on average 8.66% less per year over the past decade (4.63% vs. 13.29%). The expense ratio of BNDX is 0.15 percentage points lower than MDY’s (0.08% vs. 0.23%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
|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.
|Molina Healthcare Inc||0.63%|
|Fair Isaac Corp||0.62%|
|XPO Logistics Inc||0.61%|
|SolarEdge Technologies Inc||0.61%|
|Camden Property Trust||0.55%|
|FactSet Research Systems Inc||0.54%|
MDY’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and XPO Logistics Inc at 0.75%, 0.63%, 0.63%, 0.62%, and 0.61%.
SolarEdge Technologies Inc (0.61%), Signature Bank (0.6%), and Graco Inc (0.55%) have a slightly smaller but still significant weight. Camden Property Trust and FactSet Research Systems Inc are also represented in the MDY’s holdings at 0.55% and 0.54%.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Standard Deviation of 0 with a Treynor Ratio of 0 and a R-squared of 0. Its Beta is 0 while BNDX’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.
The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a Treynor Ratio of 9.97 with a R-squared of 86.66 and a Mean Return of 1.08. Its Standard Deviation is 16.83 while MDY’s Beta is 1.15. Furthermore, the fund has a Alpha of -4.1 and a Sharpe Ratio of 0.73.
BNDX’s Mean Return is 1.08 points lower than that of MDY and its R-squared is 86.66 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than MDY. The Alpha and Beta of BNDX are 4.10 points higher and 1.15 points lower than MDY’s Alpha and Beta.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
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 MDY, returning 33.08% on an annual basis. The poorest year for MDY in the last ten years was 2018, with a yield of -11.28%. Most years the SPDR S&P MIDCAP 400 ETF Trust has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.51%, 15.89%, and 17.58% 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 MDY, the end total would have been $18,875. This equates to a $8,875 profit over 7 years and a compound annual growth rate (CAGR) of 13.29%.
BNDX’s CAGR is 8.66 percentage points lower than that of MDY and as a result, would have yielded $5,180 less on a $10,000 investment. Thus, BNDX performed worse than MDY by 8.66% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.