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BNDX vs. XLV: What’s The Difference?

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

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

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

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Summary

BNDXXLV
NameVanguard Total International Bond Index Fund ETF SharesHealth Care Select Sector SPDR Fund
CategoryN/AHealth
IssuerVanguardSPDR State Street Global Advisors
AUM116.41B27.88B
Avg. Return4.63%15.02%
Div. Yield0.94%1.4%
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 Health Care Select Sector SPDR Fund (XLV) is a Health fund that is issued by SPDR State Street Global Advisors. It currently has 27.88B total assets under management and has yielded an average annual return of 15.02% over the past 10 years. The fund has a dividend yield of 1.4% with an expense ratio of 0.12%.

BNDX’s dividend yield is 0.46% lower than that of XLV (0.94% vs. 1.4%). Also, BNDX yielded on average 10.40% less per year over the past decade (4.63% vs. 15.02%). The expense ratio of BNDX is 0.04 percentage points lower than XLV’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.

XLV - Holdings

XLV HoldingsWeight
Johnson & Johnson9.19%
UnitedHealth Group Inc8.01%
Pfizer Inc4.64%
Abbott Laboratories4.36%
AbbVie Inc4.21%
Thermo Fisher Scientific Inc4.2%
Merck & Co Inc4.17%
Eli Lilly and Co3.87%
Danaher Corp3.61%
Medtronic PLC3.54%

XLV’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and AbbVie Inc at 9.19%, 8.01%, 4.64%, 4.36%, and 4.21%.

Thermo Fisher Scientific Inc (4.2%), Merck & Co Inc (4.17%), and Eli Lilly and Co (3.87%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the XLV’s holdings at 3.61% and 3.54%.

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Risk Analysis

BNDXXLV
Mean Return01.27
R-squared058.19
Std. Deviation012.94
Alpha07.75
Beta00.7
Sharpe Ratio01.13
Treynor Ratio021.1

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

The Health Care Select Sector SPDR Fund (XLV) has a Mean Return of 1.27 with a Alpha of 7.75 and a Standard Deviation of 12.94. Its Sharpe Ratio is 1.13 while XLV’s Beta is 0.7. Furthermore, the fund has a Treynor Ratio of 21.1 and a R-squared of 58.19.

BNDX’s Mean Return is 1.27 points lower than that of XLV and its R-squared is 58.19 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than XLV. The Alpha and Beta of BNDX are 7.75 points lower and 0.70 points lower than XLV’s Alpha and Beta.

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Performance

Annual Returns

BNDX vs. XLV - Annual Returns

YearBNDXXLV
20204.6%13.33%
20197.88%20.63%
20182.94%6.3%
20172.4%21.7%
20164.67%-2.83%
20151.08%6.82%
20148.83%25.17%
20130.0%41.24%
20120.0%17.56%
20110.0%12.44%
20100.0%2.91%

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 XLV, returning 41.24% on an annual basis. The poorest year for XLV in the last ten years was 2016, with a yield of -2.83%. Most years the Health Care Select Sector SPDR Fund has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 12.44%, 13.33%, and 17.56% respectively.

Portfolio Growth

BNDX vs. XLV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BNDX$10,000$13,6954.63%
XLV$10,000$22,97715.02%

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 XLV, the end total would have been $22,977. This equates to a $12,977 profit over 7 years and a compound annual growth rate (CAGR) of 15.02%.

BNDX’s CAGR is 10.40 percentage points lower than that of XLV and as a result, would have yielded $9,282 less on a $10,000 investment. Thus, BNDX performed worse than XLV by 10.40% annually.


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