BSV vs. BIV: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between BSV and BIV? And which fund is better?

BSV and BIV have the same expense ratio: 0.05%. BSV is mostly comprised of AAA bonds and BIV has a high exposure to AAA bond. Overall, BSV has provided lower returns than BIV over the past ten years.

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

Summary

BSV BIV
Name Vanguard Short-Term Bond Index Fund ETF Shares Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category Short-Term Bond Intermediate-Term Bond
Issuer Vanguard Vanguard
AUM 67.71B 39.05B
Avg. Return 2.27% 5.31%
Div. Yield 1.48% 2.06%
Expense Ratio 0.05% 0.05%

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

BSV’s dividend yield is 0.58% lower than that of BIV (1.48% vs. 2.06%). Also, BSV yielded on average 3.04% less per year over the past decade (2.27% vs. 5.31%). BSV and BIV have the same expense ratio: 0.05%.

Fund Composition

Holdings

BSV - Holdings

BSV Bond Sectors Weight
AAA 71.65%
BBB 13.08%
A 11.95%
AA 3.28%
Others 0.03%
Below B 0.01%
B 0.0%
BB 0.0%
US Government 0.0%

BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

Risk Analysis

BSV BIV
Mean Return 0.16 0.35
R-squared 78.38 95.12
Std. Deviation 1.33 4.09
Alpha 0.21 -0.07
Beta 0.38 1.33
Sharpe Ratio 0.98 0.89
Treynor Ratio 3.33 2.72

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Mean Return of 0.16 with a Standard Deviation of 1.33 and a Treynor Ratio of 3.33. Its Alpha is 0.21 while BSV’s Sharpe Ratio is 0.98. Furthermore, the fund has a Beta of 0.38 and a R-squared of 78.38.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a R-squared of 95.12 with a Sharpe Ratio of 0.89 and a Treynor Ratio of 2.72. Its Beta is 1.33 while BIV’s Alpha is -0.07. Furthermore, the fund has a Mean Return of 0.35 and a Standard Deviation of 4.09.

BSV’s Mean Return is 0.19 points lower than that of BIV and its R-squared is 16.74 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than BIV. The Alpha and Beta of BSV are 0.28 points higher and 0.95 points lower than BIV’s Alpha and Beta.

Performance

Annual Returns

BSV vs. BIV - Annual Returns

Year BSV BIV
2020 4.67% 9.71%
2019 4.92% 10.19%
2018 1.34% -0.09%
2017 1.2% 3.8%
2016 1.42% 2.86%
2015 0.92% 1.23%
2014 1.32% 7.0%
2013 0.17% -3.44%
2012 1.98% 7.02%
2011 3.04% 10.62%
2010 4.0% 9.55%

BSV had its best year in 2019 with an annual return of 4.92%. BSV’s worst year over the past decade yielded 0.17% and occurred in 2013. In most years the Vanguard Short-Term Bond Index Fund ETF Shares provided moderate returns such as in 2018, 2016, and 2012 where annual returns amounted to 1.34%, 1.42%, and 1.98% respectively.

The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

BSV vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
BIV $10,000 $17,492 5.31%

A $10,000 investment in BSV would have resulted in a final balance of $12,785. This is a profit of $2,785 over 11 years and amounts to a compound annual growth rate (CAGR) of 2.27%.

With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.

BSV’s CAGR is 3.04 percentage points lower than that of BIV and as a result, would have yielded $4,707 less on a $10,000 investment. Thus, BSV performed worse than BIV by 3.04% annually.


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