The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares MSCI USA Quality Factor ETF (QUAL) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and QUAL is a iShares Large Blend fund. So, what’s the difference between BNDX and QUAL? And which fund is better?
The expense ratio of BNDX is 0.07 percentage points lower than QUAL’s (0.08% vs. 0.15%). BNDX is mostly comprised of A bonds while QUAL has a high exposure to the technology sector. Overall, BNDX has provided lower returns than QUAL over the past ten years.
In this article, we’ll compare BNDX vs. QUAL. 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 QUAL’s fund composition, holdings, and performance and examine how these affect their overall returns.
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|Name||Vanguard Total International Bond Index Fund ETF Shares||iShares MSCI USA Quality Factor 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 MSCI USA Quality Factor ETF (QUAL) is a Large Blend fund that is issued by iShares. It currently has 23.93B total assets under management and has yielded an average annual return of 13.42% over the past 10 years. The fund has a dividend yield of 1.29% with an expense ratio of 0.15%.
BNDX’s dividend yield is 0.35% lower than that of QUAL (0.94% vs. 1.29%). Also, BNDX yielded on average 8.79% less per year over the past decade (4.63% vs. 13.42%). The expense ratio of BNDX is 0.07 percentage points lower than QUAL’s (0.08% vs. 0.15%).
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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.
|Facebook Inc Class A||4.77%|
|Nike Inc Class B||4.05%|
|Johnson & Johnson||2.99%|
|Mastercard Inc Class A||2.72%|
|Alphabet Inc Class A||2.49%|
QUAL’s Top Holdings are Facebook Inc Class A, Nike Inc Class B, Microsoft Corp, Apple Inc, and Johnson & Johnson at 4.77%, 4.05%, 3.54%, 3.52%, and 2.99%.
BlackRock Inc (2.87%), Target Corp (2.8%), and Mastercard Inc Class A (2.72%) have a slightly smaller but still significant weight. NVIDIA Corp and Alphabet Inc Class A are also represented in the QUAL’s holdings at 2.71% and 2.49%.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Alpha of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its Treynor Ratio is 0 while BNDX’s Mean Return is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.
The iShares MSCI USA Quality Factor ETF (QUAL) has a Standard Deviation of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its R-squared is 0 while QUAL’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.
BNDX’s Mean Return is 0.00 points lower than that of QUAL and its R-squared is 0.00 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than QUAL. The Alpha and Beta of BNDX are 0.00 points lower and 0.00 points lower than QUAL’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 2019 was the strongest year for QUAL, returning 34.14% on an annual basis. The poorest year for QUAL in the last ten years was 2018, with a yield of -5.77%. Most years the iShares MSCI USA Quality Factor ETF has given investors modest returns, such as in 2010, 2015, and 2016, when gains were 0.0%, 5.56%, and 9.18% 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 QUAL, the end total would have been $23,251. This equates to a $13,251 profit over 7 years and a compound annual growth rate (CAGR) of 13.42%.
BNDX’s CAGR is 8.79 percentage points lower than that of QUAL and as a result, would have yielded $9,556 less on a $10,000 investment. Thus, BNDX performed worse than QUAL by 8.79% annually.
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