The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and USMV is a iShares Large Blend fund. So, what’s the difference between BNDX and USMV? And which fund is better?
The expense ratio of BNDX is 0.07 percentage points lower than USMV’s (0.08% vs. 0.15%). BNDX is mostly comprised of A bonds while USMV has a high exposure to the technology sector. Overall, BNDX has provided lower returns than USMV over the past ten years.
In this article, we’ll compare BNDX vs. USMV. We’ll look at industry exposure and holdings, as well as at their annual returns and portfolio growth. Moreover, I’ll also discuss BNDX’s and USMV’s performance, fund composition, and risk metrics and examine how these affect their overall returns.
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Summary
| BNDX | USMV | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | iShares MSCI USA Min Vol Factor ETF |
| Category | N/A | Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 116.41B | 27.6B |
| Avg. Return | 4.63% | 13.89% |
| 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 MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% 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 USMV (0.94% vs. 1.5%). Also, BNDX yielded on average 9.27% less per year over the past decade (4.63% vs. 13.89%). The expense ratio of BNDX is 0.07 percentage points lower than USMV’s (0.08% vs. 0.15%).
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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.
| USMV Holdings | Weight |
| Eli Lilly and Co | 1.64% |
| Microsoft Corp | 1.62% |
| T-Mobile US Inc | 1.51% |
| Accenture PLC Class A | 1.51% |
| Visa Inc Class A | 1.49% |
| Waste Management Inc | 1.45% |
| Adobe Inc | 1.45% |
| The Kroger Co | 1.44% |
| Johnson & Johnson | 1.42% |
| Gilead Sciences Inc | 1.42% |
USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.
Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.
Risk Analysis
| BNDX | USMV | |
| Mean Return | 0 | 0 |
| R-squared | 0 | 0 |
| Std. Deviation | 0 | 0 |
| Alpha | 0 | 0 |
| Beta | 0 | 0 |
| Sharpe Ratio | 0 | 0 |
| Treynor Ratio | 0 | 0 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Mean Return of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Alpha is 0 while BNDX’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a Treynor Ratio of 0.
The iShares MSCI USA Min Vol Factor ETF (USMV) has a Treynor Ratio of 0 with a Beta of 0 and a Alpha of 0. Its Standard Deviation is 0 while USMV’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Mean Return of 0.
BNDX’s Mean Return is 0.00 points lower than that of USMV and its R-squared is 0.00 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than USMV. The Alpha and Beta of BNDX are 0.00 points lower and 0.00 points lower than USMV’s Alpha and Beta.
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Performance
Annual Returns
| Year | BNDX | USMV |
| 2020 | 4.6% | 5.6% |
| 2019 | 7.88% | 27.77% |
| 2018 | 2.94% | 1.36% |
| 2017 | 2.4% | 18.97% |
| 2016 | 4.67% | 10.5% |
| 2015 | 1.08% | 5.5% |
| 2014 | 8.83% | 16.34% |
| 2013 | 0.0% | 25.11% |
| 2012 | 0.0% | 11.04% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 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 2019 was the strongest year for USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| USMV | $10,000 | $22,066 | 13.89% |
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 USMV, the end total would have been $22,066. This equates to a $12,066 profit over 7 years and a compound annual growth rate (CAGR) of 13.89%.
BNDX’s CAGR is 9.27 percentage points lower than that of USMV and as a result, would have yielded $8,371 less on a $10,000 investment. Thus, BNDX performed worse than USMV by 9.27% annually.
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