BSV vs. IVW: What’s The Difference?

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

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

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

Summary

BSV IVW
Name Vanguard Short-Term Bond Index Fund ETF Shares iShares S&P 500 Growth ETF
Category Short-Term Bond Large Growth
Issuer Vanguard iShares
AUM 67.71B 35.72B
Avg. Return 2.27% 16.74%
Div. Yield 1.48% 0.61%
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 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

BSV’s dividend yield is 0.87% higher than that of IVW (1.48% vs. 0.61%). Also, BSV yielded on average 14.46% less per year over the past decade (2.27% vs. 16.74%). The expense ratio of BSV is 0.13 percentage points lower than IVW’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.

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

Risk Analysis

BSV IVW
Mean Return 0.16 1.44
R-squared 78.38 93.82
Std. Deviation 1.33 13.77
Alpha 0.21 2.19
Beta 0.38 0.98
Sharpe Ratio 0.98 1.21
Treynor Ratio 3.33 17.24

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

The iShares S&P 500 Growth ETF (IVW) has a Mean Return of 1.44 with a Treynor Ratio of 17.24 and a Beta of 0.98. Its Sharpe Ratio is 1.21 while IVW’s R-squared is 93.82. Furthermore, the fund has a Alpha of 2.19 and a Standard Deviation of 13.77.

BSV’s Mean Return is 1.28 points lower than that of IVW and its R-squared is 15.44 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than IVW. The Alpha and Beta of BSV are 1.98 points lower and 0.60 points lower than IVW’s Alpha and Beta.

Performance

Annual Returns

BSV vs. IVW - Annual Returns

Year BSV IVW
2020 4.67% 33.21%
2019 4.92% 30.91%
2018 1.34% -0.17%
2017 1.2% 27.2%
2016 1.42% 6.74%
2015 0.92% 5.33%
2014 1.32% 14.67%
2013 0.17% 32.48%
2012 1.98% 14.39%
2011 3.04% 4.49%
2010 4.0% 14.84%

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 2020 was the strongest year for IVW, returning 33.21% on an annual basis. The poorest year for IVW in the last ten years was 2018, with a yield of -0.17%. Most years the iShares S&P 500 Growth ETF has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 14.39%, 14.67%, and 14.84% respectively.

Portfolio Growth

BSV vs. IVW - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
IVW $10,000 $51,915 16.74%

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 IVW, the end total would have been $51,915. This equates to a $41,915 profit over 11 years and a compound annual growth rate (CAGR) of 16.74%.

BSV’s CAGR is 14.46 percentage points lower than that of IVW and as a result, would have yielded $39,130 less on a $10,000 investment. Thus, BSV performed worse than IVW by 14.46% annually.


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