The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between BSV and EFV? And which fund is better?
The expense ratio of BSV is 0.34 percentage points lower than EFV’s (0.05% vs. 0.39%). BSV is mostly comprised of AAA bonds while EFV has a high exposure to the financial services sector. Overall, BSV has provided lower returns than EFV over the past ten years.
In this article, we’ll compare BSV vs. EFV. We’ll look at holdings and performance, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss BSV’s and EFV’s annual returns, risk metrics, and fund composition and examine how these affect their overall returns.
Summary
| BSV | EFV | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | iShares MSCI EAFE Value ETF |
| Category | Short-Term Bond | Foreign Large Value |
| Issuer | Vanguard | iShares |
| AUM | 67.71B | 14.37B |
| Avg. Return | 2.27% | 3.99% |
| Div. Yield | 1.48% | 2.94% |
| Expense Ratio | 0.05% | 0.39% |
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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
BSV’s dividend yield is 1.46% lower than that of EFV (1.48% vs. 2.94%). Also, BSV yielded on average 1.72% less per year over the past decade (2.27% vs. 3.99%). The expense ratio of BSV is 0.34 percentage points lower than EFV’s (0.05% vs. 0.39%).
Fund Composition
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.
| EFV Holdings | Weight |
| Novartis AG | 2.41% |
| Toyota Motor Corp | 2.21% |
| Commonwealth Bank of Australia | 1.59% |
| Siemens AG | 1.45% |
| Sanofi SA | 1.42% |
| HSBC Holdings PLC | 1.4% |
| TotalEnergies SE | 1.35% |
| Allianz SE | 1.23% |
| GlaxoSmithKline PLC | 1.18% |
| Rio Tinto PLC | 1.1% |
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
Risk Analysis
| BSV | EFV | |
| Mean Return | 0.16 | 0.42 |
| R-squared | 78.38 | 92.15 |
| Std. Deviation | 1.33 | 16.53 |
| Alpha | 0.21 | -1.77 |
| Beta | 0.38 | 1.05 |
| Sharpe Ratio | 0.98 | 0.26 |
| Treynor Ratio | 3.33 | 2.92 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Beta of 0.38 with a Sharpe Ratio of 0.98 and a Standard Deviation of 1.33. Its Alpha is 0.21 while BSV’s R-squared is 78.38. Furthermore, the fund has a Mean Return of 0.16 and a Treynor Ratio of 3.33.
The iShares MSCI EAFE Value ETF (EFV) has a Standard Deviation of 16.53 with a Treynor Ratio of 2.92 and a Mean Return of 0.42. Its Alpha is -1.77 while EFV’s R-squared is 92.15. Furthermore, the fund has a Sharpe Ratio of 0.26 and a Beta of 1.05.
BSV’s Mean Return is 0.26 points lower than that of EFV and its R-squared is 13.77 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than EFV. The Alpha and Beta of BSV are 1.98 points higher and 0.67 points lower than EFV’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | EFV |
| 2020 | 4.67% | -2.78% |
| 2019 | 4.92% | 15.97% |
| 2018 | 1.34% | -14.88% |
| 2017 | 1.2% | 21.22% |
| 2016 | 1.42% | 4.87% |
| 2015 | 0.92% | -5.89% |
| 2014 | 1.32% | -5.65% |
| 2013 | 0.17% | 22.61% |
| 2012 | 1.98% | 17.52% |
| 2011 | 3.04% | -12.24% |
| 2010 | 4.0% | 3.18% |
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 EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $12,785 | 2.27% |
| EFV | $10,000 | $14,134 | 3.99% |
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 EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.
BSV’s CAGR is 1.72 percentage points lower than that of EFV and as a result, would have yielded $1,349 less on a $10,000 investment. Thus, BSV performed worse than EFV by 1.72% annually.
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