The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and DIA is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between BSV and DIA? And which fund is better?
The expense ratio of BSV is 0.11 percentage points lower than DIA’s (0.05% vs. 0.16%). BSV is mostly comprised of AAA bonds while DIA has a high exposure to the financial services sector. Overall, BSV has provided lower returns than DIA over the past ten years.
In this article, we’ll compare BSV vs. DIA. We’ll look at fund composition and performance, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss BSV’s and DIA’s risk metrics, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||Vanguard Short-Term Bond Index Fund ETF Shares||SPDR Dow Jones Industrial Average ETF Trust|
|Category||Short-Term Bond||Large Value|
|Issuer||Vanguard||SPDR State Street Global Advisors|
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 SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.
BSV’s dividend yield is 0.13% lower than that of DIA (1.48% vs. 1.61%). Also, BSV yielded on average 11.08% less per year over the past decade (2.27% vs. 13.35%). The expense ratio of BSV is 0.11 percentage points lower than DIA’s (0.05% vs. 0.16%).
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|BSV Bond Sectors||Weight|
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.
|UnitedHealth Group Inc||7.63%|
|Goldman Sachs Group Inc||7.23%|
|The Home Depot Inc||6.07%|
|Visa Inc Class A||4.45%|
|Honeywell International Inc||4.18%|
DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.
Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.
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The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Beta of 0.38 with a Mean Return of 0.16 and a Standard Deviation of 1.33. Its Sharpe Ratio is 0.98 while BSV’s Alpha is 0.21. Furthermore, the fund has a R-squared of 78.38 and a Treynor Ratio of 3.33.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a R-squared of 93.31 with a Mean Return of 1.13 and a Treynor Ratio of 13.07. Its Beta is 0.97 while DIA’s Alpha is -0.94. Furthermore, the fund has a Standard Deviation of 13.68 and a Sharpe Ratio of 0.94.
BSV’s Mean Return is 0.97 points lower than that of DIA and its R-squared is 14.93 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than DIA. The Alpha and Beta of BSV are 1.15 points higher and 0.59 points lower than DIA’s Alpha and Beta.
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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 2013 was the strongest year for DIA, returning 29.41% on an annual basis. The poorest year for DIA in the last ten years was 2018, with a yield of -3.6%. Most years the SPDR Dow Jones Industrial Average ETF Trust has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 9.88%, 10.04%, and 13.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 DIA, the end total would have been $37,965. This equates to a $27,965 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.
BSV’s CAGR is 11.08 percentage points lower than that of DIA and as a result, would have yielded $25,180 less on a $10,000 investment. Thus, BSV performed worse than DIA by 11.08% annually.
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