The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and VT is a Vanguard N/A fund. So, what’s the difference between BNDX and VT? And which fund is better?
BNDX and VT have the same expense ratio: 0.08%. BNDX is mostly comprised of A bonds while VT has a high exposure to the technology sector. Overall, BNDX has provided lower returns than VT over the past ten years.
In this article, we’ll compare BNDX vs. VT. We’ll look at annual returns and performance, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss BNDX’s and VT’s industry exposure, holdings, and fund composition and examine how these affect their overall returns.
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!
Summary
| BNDX | VT | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | Vanguard Total World Stock Index Fund ETF Shares |
| Category | N/A | N/A |
| Issuer | Vanguard | Vanguard |
| AUM | 116.41B | 30.44B |
| Avg. Return | 4.63% | 10.42% |
| Div. Yield | 0.94% | 1.65% |
| Expense Ratio | 0.08% | 0.08% |
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
BNDX’s dividend yield is 0.71% lower than that of VT (0.94% vs. 1.65%). Also, BNDX yielded on average 5.79% less per year over the past decade (4.63% vs. 10.42%). BNDX and VT have the same expense ratio: 0.08%.
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
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.
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
Risk Analysis
| BNDX | VT | |
| Mean Return | 0 | 0.9 |
| R-squared | 0 | 99.35 |
| Std. Deviation | 0 | 14.19 |
| Alpha | 0 | 0.2 |
| Beta | 0 | 1.01 |
| Sharpe Ratio | 0 | 0.71 |
| Treynor Ratio | 0 | 9.5 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a R-squared of 0 with a Alpha of 0 and a Beta of 0. Its Sharpe Ratio is 0 while BNDX’s Treynor Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Standard Deviation of 0.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Standard Deviation of 14.19 with a Beta of 1.01 and a Treynor Ratio of 9.5. Its Sharpe Ratio is 0.71 while VT’s Alpha is 0.2. Furthermore, the fund has a R-squared of 99.35 and a Mean Return of 0.9.
BNDX’s Mean Return is 0.90 points lower than that of VT and its R-squared is 99.35 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than VT. The Alpha and Beta of BNDX are 0.20 points lower and 1.01 points lower than VT’s Alpha and Beta.
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).
Performance
Annual Returns
| Year | BNDX | VT |
| 2020 | 4.6% | 16.74% |
| 2019 | 7.88% | 26.8% |
| 2018 | 2.94% | -9.67% |
| 2017 | 2.4% | 24.19% |
| 2016 | 4.67% | 8.77% |
| 2015 | 1.08% | -1.88% |
| 2014 | 8.83% | 3.97% |
| 2013 | 0.0% | 22.98% |
| 2012 | 0.0% | 17.33% |
| 2011 | 0.0% | -7.71% |
| 2010 | 0.0% | 13.05% |
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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| VT | $10,000 | $18,426 | 10.42% |
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 VT, the end total would have been $18,426. This equates to a $8,426 profit over 7 years and a compound annual growth rate (CAGR) of 10.42%.
BNDX’s CAGR is 5.79 percentage points lower than that of VT and as a result, would have yielded $4,731 less on a $10,000 investment. Thus, BNDX performed worse than VT by 5.79% 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.
