BNDX vs. VHT: What’s The Difference?

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and VHT is a Vanguard Health fund. So, what’s the difference between BNDX and VHT? And which fund is better?

The expense ratio of BNDX is 0.02 percentage points lower than VHT’s (0.08% vs. 0.1%). BNDX is mostly comprised of A bonds while VHT has a high exposure to the healthcare sector. Overall, BNDX has provided lower returns than VHT over the past ten years.

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

Summary

BNDX VHT
Name Vanguard Total International Bond Index Fund ETF Shares Vanguard Health Care Index Fund ETF Shares
Category N/A Health
Issuer Vanguard Vanguard
AUM 116.41B 17.94B
Avg. Return 4.63% 16.04%
Div. Yield 0.94% 1.15%
Expense Ratio 0.08% 0.1%

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 Vanguard Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.

BNDX’s dividend yield is 0.21% lower than that of VHT (0.94% vs. 1.15%). Also, BNDX yielded on average 11.41% less per year over the past decade (4.63% vs. 16.04%). The expense ratio of BNDX is 0.02 percentage points lower than VHT’s (0.08% vs. 0.1%).

Fund Composition

Holdings

BNDX - 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.

VHT - Holdings

VHT Holdings Weight
Johnson & Johnson 7.34%
UnitedHealth Group Inc 6.44%
Pfizer Inc 3.7%
Abbott Laboratories 3.48%
Thermo Fisher Scientific Inc 3.37%
AbbVie Inc 3.37%
Merck & Co Inc 3.33%
Eli Lilly and Co 3.17%
Danaher Corp 2.91%
Medtronic PLC 2.83%

VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.

AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.

Risk Analysis

BNDX VHT
Mean Return 0 1.33
R-squared 0 59.86
Std. Deviation 0 13.58
Alpha 0 7.99
Beta 0 0.75
Sharpe Ratio 0 1.13
Treynor Ratio 0 20.74

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

The Vanguard Health Care Index Fund ETF Shares (VHT) has a Standard Deviation of 13.58 with a Beta of 0.75 and a Mean Return of 1.33. Its R-squared is 59.86 while VHT’s Sharpe Ratio is 1.13. Furthermore, the fund has a Alpha of 7.99 and a Treynor Ratio of 20.74.

BNDX’s Mean Return is 1.33 points lower than that of VHT and its R-squared is 59.86 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than VHT. The Alpha and Beta of BNDX are 7.99 points lower and 0.75 points lower than VHT’s Alpha and Beta.

Performance

Annual Returns

BNDX vs. VHT - Annual Returns

Year BNDX VHT
2020 4.6% 18.21%
2019 7.88% 21.97%
2018 2.94% 5.55%
2017 2.4% 23.34%
2016 4.67% -3.33%
2015 1.08% 7.22%
2014 8.83% 25.38%
2013 0.0% 42.67%
2012 0.0% 19.1%
2011 0.0% 10.57%
2010 0.0% 5.75%

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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.

Portfolio Growth

BNDX vs. VHT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BNDX $10,000 $13,695 4.63%
VHT $10,000 $24,392 16.04%

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 VHT, the end total would have been $24,392. This equates to a $14,392 profit over 7 years and a compound annual growth rate (CAGR) of 16.04%.

BNDX’s CAGR is 11.41 percentage points lower than that of VHT and as a result, would have yielded $10,697 less on a $10,000 investment. Thus, BNDX performed worse than VHT by 11.41% annually.


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