BNDX vs. XLC: What’s The Difference?

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and XLC is a SPDR State Street Global Advisors Communications fund. So, what’s the difference between BNDX and XLC? And which fund is better?

The expense ratio of BNDX is 0.04 percentage points lower than XLC’s (0.08% vs. 0.12%). BNDX is mostly comprised of A bonds while XLC has a high exposure to the communication services sector. Overall, BNDX has provided lower returns than XLC over the past ten years.

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

Summary

BNDX XLC
Name Vanguard Total International Bond Index Fund ETF Shares Communication Services Select Sector SPDR Fund
Category N/A Communications
Issuer Vanguard SPDR State Street Global Advisors
AUM 116.41B 14.09B
Avg. Return 4.63% 29.04%
Div. Yield 0.94% 0.62%
Expense Ratio 0.08% 0.12%

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 Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors. It currently has 14.09B total assets under management and has yielded an average annual return of 29.04% over the past 10 years. The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.

BNDX’s dividend yield is 0.32% higher than that of XLC (0.94% vs. 0.62%). Also, BNDX yielded on average 24.41% less per year over the past decade (4.63% vs. 29.04%). The expense ratio of BNDX is 0.04 percentage points lower than XLC’s (0.08% vs. 0.12%).

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.

XLC - Holdings

XLC Holdings Weight
Facebook Inc A 23.75%
Alphabet Inc A 11.49%
Alphabet Inc Class C 11.16%
Netflix Inc 4.78%
Charter Communications Inc A 4.65%
Comcast Corp Class A 4.44%
T-Mobile US Inc 4.41%
The Walt Disney Co 4.39%
AT&T Inc 4.35%
Verizon Communications Inc 4.33%

XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.

Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight. AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.

Risk Analysis

BNDX XLC
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 R-squared of 0 with a Alpha of 0 and a Sharpe Ratio of 0. Its Beta is 0 while BNDX’s Standard Deviation is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Mean Return of 0.

The Communication Services Select Sector SPDR Fund (XLC) has a Standard Deviation of 0 with a Treynor Ratio of 0 and a Beta of 0. Its R-squared is 0 while XLC’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.

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

Performance

Annual Returns

BNDX vs. XLC - Annual Returns

Year BNDX XLC
2020 4.6% 26.85%
2019 7.88% 31.22%
2018 2.94% 0.0%
2017 2.4% 0.0%
2016 4.67% 0.0%
2015 1.08% 0.0%
2014 8.83% 0.0%
2013 0.0% 0.0%
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 2019 was the strongest year for XLC, returning 31.22% on an annual basis. The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%. Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

BNDX vs. XLC - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BNDX $10,000 $11,284 4.63%
XLC $10,000 $16,645 29.04%

A $10,000 investment in BNDX would have resulted in a final balance of $11,284. This is a profit of $1,284 over 2 years and amounts to a compound annual growth rate (CAGR) of 4.63%.

With a $10,000 investment in XLC, the end total would have been $16,645. This equates to a $6,645 profit over 2 years and a compound annual growth rate (CAGR) of 29.04%.

BNDX’s CAGR is 24.41 percentage points lower than that of XLC and as a result, would have yielded $5,361 less on a $10,000 investment. Thus, BNDX performed worse than XLC by 24.41% annually.


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