The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and TLT is a iShares Long Government fund. So, what’s the difference between BNDX and TLT? And which fund is better?
The expense ratio of BNDX is 0.07 percentage points lower than TLT’s (0.08% vs. 0.15%). BNDX is mostly comprised of A bonds and TLT has a high exposure to AAA bond. Overall, BNDX has provided lower returns than TLT over the past ten years.
In this article, we’ll compare BNDX vs. TLT. We’ll look at fund composition and industry exposure, as well as at their holdings and risk metrics. Moreover, I’ll also discuss BNDX’s and TLT’s portfolio growth, performance, and annual returns and examine how these affect their overall returns.
Summary
| BNDX | TLT | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | iShares 20+ Year Treasury Bond ETF |
| Category | N/A | Long Government |
| Issuer | Vanguard | iShares |
| AUM | 116.41B | 15.15B |
| Avg. Return | 4.63% | 9.00% |
| Div. Yield | 0.94% | 1.5% |
| Expense Ratio | 0.08% | 0.15% |
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 20+ Year Treasury Bond ETF (TLT) is a Long Government fund that is issued by iShares. It currently has 15.15B total assets under management and has yielded an average annual return of 9.00% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
BNDX’s dividend yield is 0.56% lower than that of TLT (0.94% vs. 1.5%). Also, BNDX yielded on average 4.37% less per year over the past decade (4.63% vs. 9.00%). The expense ratio of BNDX is 0.07 percentage points lower than TLT’s (0.08% vs. 0.15%).
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.
| TLT Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
TLT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| BNDX | TLT | |
| Mean Return | 0 | 0.63 |
| R-squared | 0 | 68.76 |
| Std. Deviation | 0 | 12.76 |
| Alpha | 0 | -2.83 |
| Beta | 0 | 3.54 |
| Sharpe Ratio | 0 | 0.55 |
| Treynor Ratio | 0 | 1.82 |
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 Alpha is 0 while BNDX’s Sharpe Ratio is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Standard Deviation of 0.
The iShares 20+ Year Treasury Bond ETF (TLT) has a Sharpe Ratio of 0.55 with a R-squared of 68.76 and a Beta of 3.54. Its Standard Deviation is 12.76 while TLT’s Treynor Ratio is 1.82. Furthermore, the fund has a Mean Return of 0.63 and a Alpha of -2.83.
BNDX’s Mean Return is 0.63 points lower than that of TLT and its R-squared is 68.76 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than TLT. The Alpha and Beta of BNDX are 2.83 points higher and 3.54 points lower than TLT’s Alpha and Beta.
Performance
Annual Returns
| Year | BNDX | TLT |
| 2020 | 4.6% | 17.92% |
| 2019 | 7.88% | 14.93% |
| 2018 | 2.94% | -2.07% |
| 2017 | 2.4% | 8.92% |
| 2016 | 4.67% | 1.36% |
| 2015 | 1.08% | -1.65% |
| 2014 | 8.83% | 27.35% |
| 2013 | 0.0% | -13.91% |
| 2012 | 0.0% | 3.25% |
| 2011 | 0.0% | 33.6% |
| 2010 | 0.0% | 9.25% |
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 2011 was the strongest year for TLT, returning 33.6% on an annual basis. The poorest year for TLT in the last ten years was 2013, with a yield of -13.91%. Most years the iShares 20+ Year Treasury Bond ETF has given investors modest returns, such as in 2012, 2017, and 2010, when gains were 3.25%, 8.92%, and 9.25% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| TLT | $10,000 | $18,352 | 9.00% |
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 TLT, the end total would have been $18,352. This equates to a $8,352 profit over 7 years and a compound annual growth rate (CAGR) of 9.00%.
BNDX’s CAGR is 4.37 percentage points lower than that of TLT and as a result, would have yielded $4,657 less on a $10,000 investment. Thus, BNDX performed worse than TLT by 4.37% annually.
Current recommendations:
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.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
