The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares Russell Mid-Cap Value ETF (IWS) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and IWS is a iShares Mid-Cap Value fund. So, what’s the difference between BSV and IWS? And which fund is better?
The expense ratio of BSV is 0.18 percentage points lower than IWS’s (0.05% vs. 0.23%). BSV is mostly comprised of AAA bonds while IWS has a high exposure to the financial services sector. Overall, BSV has provided lower returns than IWS over the past ten years.
In this article, we’ll compare BSV vs. IWS. We’ll look at holdings and risk metrics, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss BSV’s and IWS’s portfolio growth, performance, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Short-Term Bond Index Fund ETF Shares||iShares Russell Mid-Cap Value ETF|
|Category||Short-Term Bond||Mid-Cap Value|
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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.
BSV’s dividend yield is 0.14% higher than that of IWS (1.48% vs. 1.34%). Also, BSV yielded on average 10.08% less per year over the past decade (2.27% vs. 12.35%). The expense ratio of BSV is 0.18 percentage points lower than IWS’s (0.05% vs. 0.23%).
|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.
|Marvell Technology Inc||0.69%|
|IHS Markit Ltd||0.62%|
|Prudential Financial Inc||0.56%|
|Otis Worldwide Corp Ordinary Shares||0.54%|
|International Flavors & Fragrances Inc||0.53%|
|Xcel Energy Inc||0.52%|
|Motorola Solutions Inc||0.52%|
IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.
International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Mean Return of 0.16 with a R-squared of 78.38 and a Treynor Ratio of 3.33. Its Standard Deviation is 1.33 while BSV’s Alpha is 0.21. Furthermore, the fund has a Sharpe Ratio of 0.98 and a Beta of 0.38.
The iShares Russell Mid-Cap Value ETF (IWS) has a Standard Deviation of 16.03 with a Alpha of -4.11 and a Beta of 1.1. Its Mean Return is 1.06 while IWS’s R-squared is 87.04. Furthermore, the fund has a Treynor Ratio of 10.3 and a Sharpe Ratio of 0.75.
BSV’s Mean Return is 0.90 points lower than that of IWS and its R-squared is 8.66 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than IWS. The Alpha and Beta of BSV are 4.32 points higher and 0.72 points lower than IWS’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 2013 was the strongest year for IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.
BSV’s CAGR is 10.08 percentage points lower than that of IWS and as a result, would have yielded $20,298 less on a $10,000 investment. Thus, BSV performed worse than IWS by 10.08% annually.
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