BSV vs. IWP: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between BSV and IWP? And which fund is better?

The expense ratio of BSV is 0.19 percentage points lower than IWP’s (0.05% vs. 0.24%). BSV is mostly comprised of AAA bonds while IWP has a high exposure to the technology sector. Overall, BSV has provided lower returns than IWP over the past ten years.

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

Summary

BSV IWP
Name Vanguard Short-Term Bond Index Fund ETF Shares iShares Russell Mid-Cap Growth ETF
Category Short-Term Bond Mid-Cap Growth
Issuer Vanguard iShares
AUM 67.71B 15.7B
Avg. Return 2.27% 16.75%
Div. Yield 1.48% 0.26%
Expense Ratio 0.05% 0.24%

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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

BSV’s dividend yield is 1.22% higher than that of IWP (1.48% vs. 0.26%). Also, BSV yielded on average 14.48% less per year over the past decade (2.27% vs. 16.75%). The expense ratio of BSV is 0.19 percentage points lower than IWP’s (0.05% vs. 0.24%).

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.

IWP - Holdings

IWP Holdings Weight
IDEXX Laboratories Inc 1.3%
DocuSign Inc 1.3%
Roku Inc Class A 1.29%
Match Group Inc 1.06%
Chipotle Mexican Grill Inc 1.06%
Pinterest Inc 1.05%
Veeva Systems Inc Class A 1.04%
Palantir Technologies Inc Ordinary Shares – Class A 1.04%
Lululemon Athletica Inc 1.01%
DexCom Inc 1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

Risk Analysis

BSV IWP
Mean Return 0.16 1.27
R-squared 78.38 87.01
Std. Deviation 1.33 16.05
Alpha 0.21 -1.03
Beta 0.38 1.1
Sharpe Ratio 0.98 0.91
Treynor Ratio 3.33 12.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Alpha of -1.03 with a Mean Return of 1.27 and a R-squared of 87.01. Its Treynor Ratio is 12.98 while IWP’s Standard Deviation is 16.05. Furthermore, the fund has a Beta of 1.1 and a Sharpe Ratio of 0.91.

BSV’s Mean Return is 1.11 points lower than that of IWP and its R-squared is 8.63 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than IWP. The Alpha and Beta of BSV are 1.24 points higher and 0.72 points lower than IWP’s Alpha and Beta.

Performance

Annual Returns

BSV vs. IWP - Annual Returns

Year BSV IWP
2020 4.67% 35.29%
2019 4.92% 35.14%
2018 1.34% -4.95%
2017 1.2% 24.98%
2016 1.42% 7.15%
2015 0.92% -0.39%
2014 1.32% 11.68%
2013 0.17% 35.44%
2012 1.98% 15.62%
2011 3.04% -1.82%
2010 4.0% 26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

BSV vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
IWP $10,000 $50,191 16.75%

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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.

BSV’s CAGR is 14.48 percentage points lower than that of IWP and as a result, would have yielded $37,406 less on a $10,000 investment. Thus, BSV performed worse than IWP by 14.48% annually.


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