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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|Name||Vanguard Total International Bond Index Fund ETF Shares||Health Care Select Sector SPDR Fund|
|Issuer||Vanguard||SPDR State Street Global Advisors|
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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|BNDX Bond Sectors||Weight|
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.
|Johnson & Johnson||9.19%|
|UnitedHealth Group Inc||8.01%|
|Thermo Fisher Scientific Inc||4.2%|
|Merck & Co Inc||4.17%|
|Eli Lilly and Co||3.87%|
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%.
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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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.
|Fund||Initial Balance||Final Balance||CAGR|
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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