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BNDX vs. TQQQ: What’s The Difference?

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between BNDX and TQQQ? And which fund is better?

The expense ratio of BNDX is 0.87 percentage points lower than TQQQ’s (0.08% vs. 0.95%). BNDX is mostly comprised of A bonds while TQQQ has a high exposure to the technology sector. Overall, BNDX has provided lower returns than TQQQ over the past ten years.

In this article, we’ll compare BNDX vs. TQQQ. We’ll look at performance and holdings, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss BNDX’s and TQQQ’s industry exposure, risk metrics, and annual returns and examine how these affect their overall returns.

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Summary

BNDXTQQQ
NameVanguard Total International Bond Index Fund ETF SharesProShares UltraPro QQQ
CategoryN/ATrading–Leveraged Equity
IssuerVanguardProShares
AUM116.41B12.41B
Avg. Return4.63%61.22%
Div. Yield0.94%0.0%
Expense Ratio0.08%0.95%

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 ProShares UltraPro QQQ (TQQQ) is a Trading–Leveraged Equity fund that is issued by ProShares. It currently has 12.41B total assets under management and has yielded an average annual return of 61.22% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.95%.

BNDX’s dividend yield is 0.94% higher than that of TQQQ (0.94% vs. 0.0%). Also, BNDX yielded on average 56.59% less per year over the past decade (4.63% vs. 61.22%). The expense ratio of BNDX is 0.87 percentage points lower than TQQQ’s (0.08% vs. 0.95%).

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Fund Composition

Holdings

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

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.

TQQQ - Holdings

TQQQ HoldingsWeight
Nasdaq 100 Index Swap Goldman Sachs International45.11%
Nasdaq 100 Index Swap Societe Generale44.73%
Nasdaq 100 Index Swap Bnp Paribas38.05%
Nasdaq 100 Index Swap Bank Of America Na31.53%
Nasdaq 100 Index Swap Citibank Na31.49%
Nasdaq 100 Index Swap Jp Morgan Securities26.2%
Apple Inc7.49%
Microsoft Corp6.69%
Nasdaq 100 Index Swap Credit Suisse International5.9%
Amazon.com Inc5.68%

TQQQ’s Top Holdings are Nasdaq 100 Index Swap Goldman Sachs International, Nasdaq 100 Index Swap Societe Generale, Nasdaq 100 Index Swap Bnp Paribas, Nasdaq 100 Index Swap Bank Of America Na, and Nasdaq 100 Index Swap Citibank Na at 45.11%, 44.73%, 38.05%, 31.53%, and 31.49%.

Nasdaq 100 Index Swap Jp Morgan Securities (26.2%), Apple Inc (7.49%), and Microsoft Corp (6.69%) have a slightly smaller but still significant weight. Nasdaq 100 Index Swap Credit Suisse International and Amazon.com Inc are also represented in the TQQQ’s holdings at 5.9% and 5.68%.

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Risk Analysis

BNDXTQQQ
Mean Return04.65
R-squared083.64
Std. Deviation050.08
Alpha07.29
Beta03.37
Sharpe Ratio01.1
Treynor Ratio015.65

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Beta of 0 with a Mean Return of 0 and a Alpha of 0. Its Treynor Ratio is 0 while BNDX’s Sharpe Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.

The ProShares UltraPro QQQ (TQQQ) has a R-squared of 83.64 with a Alpha of 7.29 and a Standard Deviation of 50.08. Its Treynor Ratio is 15.65 while TQQQ’s Sharpe Ratio is 1.1. Furthermore, the fund has a Mean Return of 4.65 and a Beta of 3.37.

BNDX’s Mean Return is 4.65 points lower than that of TQQQ and its R-squared is 83.64 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than TQQQ. The Alpha and Beta of BNDX are 7.29 points lower and 3.37 points lower than TQQQ’s Alpha and Beta.

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Performance

Annual Returns

BNDX vs. TQQQ - Annual Returns

YearBNDXTQQQ
20204.6%109.85%
20197.88%133.93%
20182.94%-19.65%
20172.4%118.65%
20164.67%11.04%
20151.08%17.41%
20148.83%56.82%
20130.0%139.98%
20120.0%51.95%
20110.0%-7.77%
20100.0%0.0%

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 TQQQ, returning 139.98% on an annual basis. The poorest year for TQQQ in the last ten years was 2018, with a yield of -19.65%. Most years the ProShares UltraPro QQQ has given investors modest returns, such as in 2015, 2012, and 2014, when gains were 17.41%, 51.95%, and 56.82% respectively.

Portfolio Growth

BNDX vs. TQQQ - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BNDX$10,000$13,6954.63%
TQQQ$10,000$176,32561.22%

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 TQQQ, the end total would have been $176,325. This equates to a $166,325 profit over 7 years and a compound annual growth rate (CAGR) of 61.22%.

BNDX’s CAGR is 56.59 percentage points lower than that of TQQQ and as a result, would have yielded $162,630 less on a $10,000 investment. Thus, BNDX performed worse than TQQQ by 56.59% annually.


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