The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and IUSB is a iShares N/A fund. So, what’s the difference between BSV and IUSB? And which fund is better?
The expense ratio of BSV is 0.01 percentage points lower than IUSB’s (0.05% vs. 0.06%). BSV is mostly comprised of AAA bonds and IUSB has a high exposure to AAA bond. Overall, BSV has provided lower returns than IUSB over the past ten years.
In this article, we’ll compare BSV vs. IUSB. We’ll look at industry exposure and fund composition, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss BSV’s and IUSB’s risk metrics, annual returns, and performance and examine how these affect their overall returns.
|Name||Vanguard Short-Term Bond Index Fund ETF Shares||iShares Core Total USD Bond Market ETF|
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 Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
BSV’s dividend yield is 0.62% lower than that of IUSB (1.48% vs. 2.1%). Also, BSV yielded on average 1.86% less per year over the past decade (2.27% vs. 4.13%). The expense ratio of BSV is 0.01 percentage points lower than IUSB’s (0.05% vs. 0.06%).
|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.
|IUSB Bond Sectors||Weight|
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Alpha of 0.21 with a Sharpe Ratio of 0.98 and a Mean Return of 0.16. Its Beta is 0.38 while BSV’s Standard Deviation is 1.33. Furthermore, the fund has a Treynor Ratio of 3.33 and a R-squared of 78.38.
The iShares Core Total USD Bond Market ETF (IUSB) has a Treynor Ratio of 0 with a Alpha of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while IUSB’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.
BSV’s Mean Return is 0.16 points higher than that of IUSB and its R-squared is 78.38 points higher. With a Standard Deviation of 1.33, BSV is slightly more volatile than IUSB. The Alpha and Beta of BSV are 0.21 points higher and 0.38 points higher than IUSB’s Alpha and Beta.
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 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in BSV would have resulted in a final balance of $11,527. This is a profit of $1,527 over 6 years and amounts to a compound annual growth rate (CAGR) of 2.27%.
With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
BSV’s CAGR is 1.86 percentage points lower than that of IUSB and as a result, would have yielded $1,177 less on a $10,000 investment. Thus, BSV performed worse than IUSB by 1.86% annually.
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