The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between BNDX and SCHG? And which fund is better?
The expense ratio of BNDX is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%). BNDX is mostly comprised of A bonds while SCHG has a high exposure to the technology sector. Overall, BNDX has provided lower returns than SCHG over the past ten years.
In this article, we’ll compare BNDX vs. SCHG. We’ll look at annual returns and portfolio growth, as well as at their fund composition and performance. Moreover, I’ll also discuss BNDX’s and SCHG’s risk metrics, holdings, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Total International Bond Index Fund ETF Shares||Schwab U.S. Large-Cap Growth 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 Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
BNDX’s dividend yield is 0.51% higher than that of SCHG (0.94% vs. 0.43%). Also, BNDX yielded on average 13.18% less per year over the past decade (4.63% vs. 17.81%). The expense ratio of BNDX is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! 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.
|Facebook Inc A||4.45%|
|Alphabet Inc A||3.93%|
|Alphabet Inc Class C||3.82%|
|Visa Inc Class A||2.12%|
|UnitedHealth Group Inc||2.02%|
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
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).
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Beta of 0 with a R-squared of 0 and a Mean Return of 0. Its Standard Deviation is 0 while BNDX’s Sharpe Ratio is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Alpha of 0.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Treynor Ratio of 16.3 with a Standard Deviation of 14.78 and a R-squared of 92.92. Its Mean Return is 1.46 while SCHG’s Beta is 1.05. Furthermore, the fund has a Sharpe Ratio of 1.14 and a Alpha of 1.97.
BNDX’s Mean Return is 1.46 points lower than that of SCHG and its R-squared is 92.92 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than SCHG. The Alpha and Beta of BNDX are 1.97 points lower and 1.05 points lower than SCHG’s Alpha and Beta.
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!
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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% 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 SCHG, the end total would have been $30,541. This equates to a $20,541 profit over 7 years and a compound annual growth rate (CAGR) of 17.81%.
BNDX’s CAGR is 13.18 percentage points lower than that of SCHG and as a result, would have yielded $16,846 less on a $10,000 investment. Thus, BNDX performed worse than SCHG by 13.18% 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.