BSV vs. IVE: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and IVE is a iShares Large Value fund. So, what’s the difference between BSV and IVE? And which fund is better?

The expense ratio of BSV is 0.13 percentage points lower than IVE’s (0.05% vs. 0.18%). BSV is mostly comprised of AAA bonds while IVE has a high exposure to the financial services sector. Overall, BSV has provided lower returns than IVE over the past ten years.

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

Summary

BSV IVE
Name Vanguard Short-Term Bond Index Fund ETF Shares iShares S&P 500 Value ETF
Category Short-Term Bond Large Value
Issuer Vanguard iShares
AUM 67.71B 22.4B
Avg. Return 2.27% 11.68%
Div. Yield 1.48% 1.88%
Expense Ratio 0.05% 0.18%

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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

BSV’s dividend yield is 0.40% lower than that of IVE (1.48% vs. 1.88%). Also, BSV yielded on average 9.41% less per year over the past decade (2.27% vs. 11.68%). The expense ratio of BSV is 0.13 percentage points lower than IVE’s (0.05% vs. 0.18%).

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.

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

Risk Analysis

BSV IVE
Mean Return 0.16 1.05
R-squared 78.38 92.08
Std. Deviation 1.33 14.3
Alpha 0.21 -2.9
Beta 0.38 1.01
Sharpe Ratio 0.98 0.83
Treynor Ratio 3.33 11.41

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

The iShares S&P 500 Value ETF (IVE) has a R-squared of 92.08 with a Beta of 1.01 and a Alpha of -2.9. Its Mean Return is 1.05 while IVE’s Treynor Ratio is 11.41. Furthermore, the fund has a Sharpe Ratio of 0.83 and a Standard Deviation of 14.3.

BSV’s Mean Return is 0.89 points lower than that of IVE and its R-squared is 13.70 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than IVE. The Alpha and Beta of BSV are 3.11 points higher and 0.63 points lower than IVE’s Alpha and Beta.

Performance

Annual Returns

BSV vs. IVE - Annual Returns

Year BSV IVE
2020 4.67% 1.24%
2019 4.92% 31.71%
2018 1.34% -9.09%
2017 1.2% 15.19%
2016 1.42% 17.17%
2015 0.92% -3.24%
2014 1.32% 12.14%
2013 0.17% 31.69%
2012 1.98% 17.45%
2011 3.04% -0.63%
2010 4.0% 14.9%

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 IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

BSV vs. IVE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
IVE $10,000 $31,350 11.68%

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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

BSV’s CAGR is 9.41 percentage points lower than that of IVE and as a result, would have yielded $18,565 less on a $10,000 investment. Thus, BSV performed worse than IVE by 9.41% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply