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BNDX vs. XLI: What’s The Difference?

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

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

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

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Summary

BNDXXLI
NameVanguard Total International Bond Index Fund ETF SharesIndustrial Select Sector SPDR Fund
CategoryN/AIndustrials
IssuerVanguardSPDR State Street Global Advisors
AUM116.41B19.33B
Avg. Return4.63%14.44%
Div. Yield0.94%1.25%
Expense Ratio0.08%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 Industrial Select Sector SPDR Fund (XLI) is a Industrials fund that is issued by SPDR State Street Global Advisors. It currently has 19.33B total assets under management and has yielded an average annual return of 14.44% over the past 10 years. The fund has a dividend yield of 1.25% with an expense ratio of 0.12%.

BNDX’s dividend yield is 0.31% lower than that of XLI (0.94% vs. 1.25%). Also, BNDX yielded on average 9.81% less per year over the past decade (4.63% vs. 14.44%). The expense ratio of BNDX is 0.04 percentage points lower than XLI’s (0.08% vs. 0.12%).

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Fund Composition

Holdings

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

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.

XLI - Holdings

XLI HoldingsWeight
Honeywell International Inc4.9%
United Parcel Service Inc Class B4.84%
Union Pacific Corp4.7%
Boeing Co4.24%
Raytheon Technologies Corp4.16%
Caterpillar Inc3.84%
General Electric Co3.8%
3M Co3.7%
Deere & Co3.54%
Lockheed Martin Corp2.98%

XLI’s Top Holdings are Honeywell International Inc, United Parcel Service Inc Class B, Union Pacific Corp, Boeing Co, and Raytheon Technologies Corp at 4.9%, 4.84%, 4.7%, 4.24%, and 4.16%.

Caterpillar Inc (3.84%), General Electric Co (3.8%), and 3M Co (3.7%) have a slightly smaller but still significant weight. Deere & Co and Lockheed Martin Corp are also represented in the XLI’s holdings at 3.54% and 2.98%.

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Risk Analysis

BNDXXLI
Mean Return01.14
R-squared078.97
Std. Deviation017.13
Alpha02.38
Beta01.08
Sharpe Ratio00.76
Treynor Ratio011.34

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Sharpe Ratio of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while BNDX’s R-squared is 0. Furthermore, the fund has a Standard Deviation of 0 and a Alpha of 0.

The Industrial Select Sector SPDR Fund (XLI) has a Standard Deviation of 17.13 with a Treynor Ratio of 11.34 and a Beta of 1.08. Its Sharpe Ratio is 0.76 while XLI’s Mean Return is 1.14. Furthermore, the fund has a R-squared of 78.97 and a Alpha of 2.38.

BNDX’s Mean Return is 1.14 points lower than that of XLI and its R-squared is 78.97 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than XLI. The Alpha and Beta of BNDX are 2.38 points lower and 1.08 points lower than XLI’s Alpha and Beta.

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Performance

Annual Returns

BNDX vs. XLI - Annual Returns

YearBNDXXLI
20204.6%11.0%
20197.88%29.11%
20182.94%-13.1%
20172.4%23.85%
20164.67%19.93%
20151.08%-4.27%
20148.83%10.44%
20130.0%40.44%
20120.0%14.86%
20110.0%-1.01%
20100.0%27.62%

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 XLI, returning 40.44% on an annual basis. The poorest year for XLI in the last ten years was 2018, with a yield of -13.1%. Most years the Industrial Select Sector SPDR Fund has given investors modest returns, such as in 2020, 2012, and 2016, when gains were 11.0%, 14.86%, and 19.93% respectively.

Portfolio Growth

BNDX vs. XLI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BNDX$10,000$13,6954.63%
XLI$10,000$19,55614.44%

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 XLI, the end total would have been $19,556. This equates to a $9,556 profit over 7 years and a compound annual growth rate (CAGR) of 14.44%.

BNDX’s CAGR is 9.81 percentage points lower than that of XLI and as a result, would have yielded $5,861 less on a $10,000 investment. Thus, BNDX performed worse than XLI by 9.81% annually.


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