The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Vanguard High Dividend Yield Index Fund ETF Shares (VYM) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and VYM is a Vanguard Large Value fund. So, what’s the difference between BNDX and VYM? And which fund is better?
The expense ratio of BNDX is 0.02 percentage points higher than VYM’s (0.08% vs. 0.06%). BNDX is mostly comprised of A bonds while VYM has a high exposure to the financial services sector. Overall, BNDX has provided lower returns than VYM over the past ten years.
In this article, we’ll compare BNDX vs. VYM. We’ll look at annual returns and fund composition, as well as at their performance and holdings. Moreover, I’ll also discuss BNDX’s and VYM’s portfolio growth, risk metrics, and industry exposure and examine how these affect their overall returns.
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Summary
| BNDX | VYM | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | Vanguard High Dividend Yield Index Fund ETF Shares |
| Category | N/A | Large Value |
| Issuer | Vanguard | Vanguard |
| AUM | 116.41B | 48.5B |
| Avg. Return | 4.63% | 12.20% |
| Div. Yield | 0.94% | 2.79% |
| Expense Ratio | 0.08% | 0.06% |
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 High Dividend Yield Index Fund ETF Shares (VYM) is a Large Value fund that is issued by Vanguard. It currently has 48.5B total assets under management and has yielded an average annual return of 12.20% over the past 10 years. The fund has a dividend yield of 2.79% with an expense ratio of 0.06%.
BNDX’s dividend yield is 1.85% lower than that of VYM (0.94% vs. 2.79%). Also, BNDX yielded on average 7.57% less per year over the past decade (4.63% vs. 12.20%). The expense ratio of BNDX is 0.02 percentage points higher than VYM’s (0.08% vs. 0.06%).
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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.
| VYM Holdings | Weight |
| JPMorgan Chase & Co | 3.53% |
| Johnson & Johnson | 3.28% |
| The Home Depot Inc | 2.59% |
| Procter & Gamble Co | 2.48% |
| Bank of America Corp | 2.35% |
| Exxon Mobil Corp | 2.02% |
| Comcast Corp Class A | 1.96% |
| Verizon Communications Inc | 1.75% |
| Intel Corp | 1.71% |
| Cisco Systems Inc | 1.69% |
VYM’s Top Holdings are JPMorgan Chase & Co, Johnson & Johnson, The Home Depot Inc, Procter & Gamble Co, and Bank of America Corp at 3.53%, 3.28%, 2.59%, 2.48%, and 2.35%.
Exxon Mobil Corp (2.02%), Comcast Corp Class A (1.96%), and Verizon Communications Inc (1.75%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the VYM’s holdings at 1.71% and 1.69%.
Risk Analysis
| BNDX | VYM | |
| Mean Return | 0 | 1.04 |
| R-squared | 0 | 88.88 |
| Std. Deviation | 0 | 12.69 |
| Alpha | 0 | -0.7 |
| Beta | 0 | 0.88 |
| Sharpe Ratio | 0 | 0.93 |
| Treynor Ratio | 0 | 13.24 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Sharpe Ratio of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its R-squared is 0 while BNDX’s Beta is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has a Beta of 0.88 with a Treynor Ratio of 13.24 and a R-squared of 88.88. Its Standard Deviation is 12.69 while VYM’s Mean Return is 1.04. Furthermore, the fund has a Alpha of -0.7 and a Sharpe Ratio of 0.93.
BNDX’s Mean Return is 1.04 points lower than that of VYM and its R-squared is 88.88 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than VYM. The Alpha and Beta of BNDX are 0.70 points higher and 0.88 points lower than VYM’s Alpha and Beta.
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Performance
Annual Returns
| Year | BNDX | VYM |
| 2020 | 4.6% | 1.14% |
| 2019 | 7.88% | 24.2% |
| 2018 | 2.94% | -5.87% |
| 2017 | 2.4% | 16.42% |
| 2016 | 4.67% | 16.87% |
| 2015 | 1.08% | 0.33% |
| 2014 | 8.83% | 13.47% |
| 2013 | 0.0% | 30.26% |
| 2012 | 0.0% | 12.68% |
| 2011 | 0.0% | 10.5% |
| 2010 | 0.0% | 14.17% |
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 VYM, returning 30.26% on an annual basis. The poorest year for VYM in the last ten years was 2018, with a yield of -5.87%. Most years the Vanguard High Dividend Yield Index Fund ETF Shares has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 12.68%, 13.47%, and 14.17% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| VYM | $10,000 | $18,315 | 12.20% |
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 VYM, the end total would have been $18,315. This equates to a $8,315 profit over 7 years and a compound annual growth rate (CAGR) of 12.20%.
BNDX’s CAGR is 7.57 percentage points lower than that of VYM and as a result, would have yielded $4,620 less on a $10,000 investment. Thus, BNDX performed worse than VYM by 7.57% annually.
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