The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Energy Select Sector SPDR Fund (XLE) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and XLE is a SPDR State Street Global Advisors Equity Energy fund. So, what’s the difference between BNDX and XLE? And which fund is better?
The expense ratio of BNDX is 0.04 percentage points lower than XLE’s (0.08% vs. 0.12%). BNDX is mostly comprised of A bonds while XLE has a high exposure to the energy sector. Overall, BNDX has provided higher returns than XLE over the past ten years.
In this article, we’ll compare BNDX vs. XLE. We’ll look at holdings and annual returns, as well as at their performance and portfolio growth. Moreover, I’ll also discuss BNDX’s and XLE’s fund composition, industry exposure, and risk metrics and examine how these affect their overall returns.
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Summary
| BNDX | XLE | |
| Name | Vanguard Total International Bond Index Fund ETF Shares | Energy Select Sector SPDR Fund |
| Category | N/A | Equity Energy |
| Issuer | Vanguard | SPDR State Street Global Advisors |
| AUM | 116.41B | 25.55B |
| Avg. Return | 4.63% | 1.28% |
| Div. Yield | 0.94% | 3.92% |
| 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 Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.
BNDX’s dividend yield is 2.98% lower than that of XLE (0.94% vs. 3.92%). Also, BNDX yielded on average 3.35% more per year over the past decade (4.63% vs. 1.28%). The expense ratio of BNDX is 0.04 percentage points lower than XLE’s (0.08% vs. 0.12%).
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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.
| XLE Holdings | Weight |
| Exxon Mobil Corp | 23.7% |
| Chevron Corp | 20.03% |
| ConocoPhillips | 4.64% |
| EOG Resources Inc | 4.46% |
| Schlumberger Ltd | 4.43% |
| Marathon Petroleum Corp | 4.17% |
| Pioneer Natural Resources Co | 4.08% |
| Phillips 66 | 4.07% |
| Kinder Morgan Inc Class P | 3.85% |
| Williams Companies Inc | 3.5% |
XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.
Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.
Risk Analysis
| BNDX | XLE | |
| Mean Return | 0 | 0.32 |
| R-squared | 0 | 61.84 |
| Std. Deviation | 0 | 27.52 |
| Alpha | 0 | -11.98 |
| Beta | 0 | 1.54 |
| Sharpe Ratio | 0 | 0.12 |
| Treynor Ratio | 0 | -0.4 |
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Alpha of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while BNDX’s Beta is 0. Furthermore, the fund has a R-squared of 0 and a Treynor Ratio of 0.
The Energy Select Sector SPDR Fund (XLE) has a Beta of 1.54 with a Alpha of -11.98 and a R-squared of 61.84. Its Sharpe Ratio is 0.12 while XLE’s Mean Return is 0.32. Furthermore, the fund has a Standard Deviation of 27.52 and a Treynor Ratio of -0.4.
BNDX’s Mean Return is 0.32 points lower than that of XLE and its R-squared is 61.84 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than XLE. The Alpha and Beta of BNDX are 11.98 points higher and 1.54 points lower than XLE’s Alpha and Beta.
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Performance
Annual Returns
| Year | BNDX | XLE |
| 2020 | 4.6% | -32.56% |
| 2019 | 7.88% | 11.87% |
| 2018 | 2.94% | -18.1% |
| 2017 | 2.4% | -1.01% |
| 2016 | 4.67% | 27.95% |
| 2015 | 1.08% | -21.47% |
| 2014 | 8.83% | -8.61% |
| 2013 | 0.0% | 26.16% |
| 2012 | 0.0% | 5.17% |
| 2011 | 0.0% | 2.98% |
| 2010 | 0.0% | 21.7% |
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 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BNDX | $10,000 | $13,695 | 4.63% |
| XLE | $10,000 | $5,616 | 1.28% |
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 XLE, the end total would have been $5,616. This equates to a $-4,384 profit over 7 years and a compound annual growth rate (CAGR) of 1.28%.
BNDX’s CAGR is 3.35 percentage points higher than that of XLE and as a result, would have yielded $8,079 more on a $10,000 investment. Thus, BNDX outperformed XLE by 3.35% annually.
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