The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between BNDX and SCHF? And which fund is better?
The expense ratio of BNDX is 0.02 percentage points higher than SCHF’s (0.08% vs. 0.06%). BNDX is mostly comprised of A bonds while SCHF has a high exposure to the financial services sector. Overall, BNDX has provided lower returns than SCHF over the past ten years.
In this article, we’ll compare BNDX vs. SCHF. We’ll look at portfolio growth and performance, as well as at their annual returns and fund composition. Moreover, I’ll also discuss BNDX’s and SCHF’s industry exposure, risk metrics, and holdings 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||Schwab International Equity ETF|
|Category||N/A||Foreign Large Blend|
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 Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.
BNDX’s dividend yield is 1.22% lower than that of SCHF (0.94% vs. 2.16%). Also, BNDX yielded on average 1.80% less per year over the past decade (4.63% vs. 6.43%). The expense ratio of BNDX is 0.02 percentage points higher than SCHF’s (0.08% vs. 0.06%).
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.
|Samsung Electronics Co Ltd||1.6%|
|ASML Holding NV||1.29%|
|Roche Holding AG||1.24%|
|Toyota Motor Corp||1.02%|
|LVMH Moet Hennessy Louis Vuitton SE||0.93%|
|Shopify Inc A||0.78%|
SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.
LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Beta of 0 with a R-squared of 0 and a Alpha of 0. Its Treynor Ratio is 0 while BNDX’s Standard Deviation is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Mean Return of 0.
The Schwab International Equity ETF (SCHF) has a Sharpe Ratio of 0.42 with a Standard Deviation of 15.08 and a Treynor Ratio of 5.39. Its Beta is 0.99 while SCHF’s Mean Return is 0.58. Furthermore, the fund has a R-squared of 98.16 and a Alpha of 0.53.
BNDX’s Mean Return is 0.58 points lower than that of SCHF and its R-squared is 98.16 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than SCHF. The Alpha and Beta of BNDX are 0.53 points lower and 0.99 points lower than SCHF’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 2017 was the strongest year for SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% 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 SCHF, the end total would have been $13,865. This equates to a $3,865 profit over 7 years and a compound annual growth rate (CAGR) of 6.43%.
BNDX’s CAGR is 1.80 percentage points lower than that of SCHF and as a result, would have yielded $170 less on a $10,000 investment. Thus, BNDX performed worse than SCHF by 1.80% 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.