BNDX vs. VTIP: What’s The Difference?

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between BNDX and VTIP? And which fund is better?

The expense ratio of BNDX is 0.03 percentage points higher than VTIP’s (0.08% vs. 0.05%). BNDX is mostly comprised of A bonds and VTIP has a high exposure to AAA bond. Overall, BNDX has provided higher returns than VTIP over the past ten years.

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

Summary

BNDX VTIP
Name Vanguard Total International Bond Index Fund ETF Shares Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares
Category N/A Inflation-Protected Bond
Issuer Vanguard Vanguard
AUM 116.41B 50.67B
Avg. Return 4.63% 1.79%
Div. Yield 0.94% 1.35%
Expense Ratio 0.08% 0.05%

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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.

BNDX’s dividend yield is 0.41% lower than that of VTIP (0.94% vs. 1.35%). Also, BNDX yielded on average 2.84% more per year over the past decade (4.63% vs. 1.79%). The expense ratio of BNDX is 0.03 percentage points higher than VTIP’s (0.08% vs. 0.05%).

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.

VTIP - Holdings

VTIP Bond Sectors Weight
AAA 99.87%
Others 0.13%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 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 VTIP
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 Sharpe Ratio of 0 with a Treynor Ratio of 0 and a Beta of 0. Its Standard Deviation is 0 while BNDX’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Alpha of 0.

The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a Sharpe Ratio of 0 with a Treynor Ratio of 0 and a Standard Deviation of 0. Its Alpha is 0 while VTIP’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Beta of 0.

BNDX’s Mean Return is 0.00 points lower than that of VTIP and its R-squared is 0.00 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than VTIP. The Alpha and Beta of BNDX are 0.00 points lower and 0.00 points lower than VTIP’s Alpha and Beta.

Performance

Annual Returns

BNDX vs. VTIP - Annual Returns

Year BNDX VTIP
2020 4.6% 4.97%
2019 7.88% 4.83%
2018 2.94% 0.54%
2017 2.4% 0.82%
2016 4.67% 2.71%
2015 1.08% -0.15%
2014 8.83% -1.17%
2013 0.0% -1.55%
2012 0.0% 0.0%
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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.

Portfolio Growth

BNDX vs. VTIP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BNDX $10,000 $13,695 4.63%
VTIP $10,000 $11,305 1.79%

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 VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.

BNDX’s CAGR is 2.84 percentage points higher than that of VTIP and as a result, would have yielded $2,390 more on a $10,000 investment. Thus, BNDX outperformed VTIP by 2.84% annually.


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