The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between BSV and IXUS? And which fund is better?
The expense ratio of BSV is 0.04 percentage points lower than IXUS’s (0.05% vs. 0.09%). BSV is mostly comprised of AAA bonds while IXUS has a high exposure to the financial services sector. Overall, BSV has provided lower returns than IXUS over the past ten years.
In this article, we’ll compare BSV vs. IXUS. We’ll look at portfolio growth and risk metrics, as well as at their annual returns and performance. Moreover, I’ll also discuss BSV’s and IXUS’s industry exposure, holdings, and fund composition and examine how these affect their overall returns.
Summary
| BSV | IXUS | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | iShares Core MSCI Total International Stock ETF |
| Category | Short-Term Bond | Foreign Large Blend |
| Issuer | Vanguard | iShares |
| AUM | 67.71B | 29.54B |
| Avg. Return | 2.27% | 6.09% |
| Div. Yield | 1.48% | 2.13% |
| Expense Ratio | 0.05% | 0.09% |
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 MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.
BSV’s dividend yield is 0.65% lower than that of IXUS (1.48% vs. 2.13%). Also, BSV yielded on average 3.81% less per year over the past decade (2.27% vs. 6.09%). The expense ratio of BSV is 0.04 percentage points lower than IXUS’s (0.05% vs. 0.09%).
Fund Composition
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.
| IXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.64% |
| Tencent Holdings Ltd | 1.35% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.34% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.06% |
| ASML Holding NV | 0.9% |
| Roche Holding AG | 0.81% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.67% |
| Novartis AG | 0.62% |
| Toyota Motor Corp | 0.59% |
IXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.
ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.
Risk Analysis
| BSV | IXUS | |
| Mean Return | 0.16 | 0 |
| R-squared | 78.38 | 0 |
| Std. Deviation | 1.33 | 0 |
| Alpha | 0.21 | 0 |
| Beta | 0.38 | 0 |
| Sharpe Ratio | 0.98 | 0 |
| Treynor Ratio | 3.33 | 0 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Alpha of 0.21 with a Treynor Ratio of 3.33 and a Standard Deviation of 1.33. Its Beta is 0.38 while BSV’s Mean Return is 0.16. Furthermore, the fund has a R-squared of 78.38 and a Sharpe Ratio of 0.98.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a R-squared of 0 and a Standard Deviation of 0. Its Sharpe Ratio is 0 while IXUS’s Beta is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Mean Return of 0.
BSV’s Mean Return is 0.16 points higher than that of IXUS and its R-squared is 78.38 points higher. With a Standard Deviation of 1.33, BSV is slightly more volatile than IXUS. The Alpha and Beta of BSV are 0.21 points higher and 0.38 points higher than IXUS’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | IXUS |
| 2020 | 4.67% | 11.14% |
| 2019 | 4.92% | 21.85% |
| 2018 | 1.34% | -14.55% |
| 2017 | 1.2% | 28.08% |
| 2016 | 1.42% | 4.66% |
| 2015 | 0.92% | -4.62% |
| 2014 | 1.32% | -3.96% |
| 2013 | 0.17% | 15.85% |
| 2012 | 1.98% | 0.0% |
| 2011 | 3.04% | 0.0% |
| 2010 | 4.0% | 0.0% |
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 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $11,679 | 2.27% |
| IXUS | $10,000 | $14,209 | 6.09% |
A $10,000 investment in BSV would have resulted in a final balance of $11,679. This is a profit of $1,679 over 7 years and amounts to a compound annual growth rate (CAGR) of 2.27%.
With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.
BSV’s CAGR is 3.81 percentage points lower than that of IXUS and as a result, would have yielded $2,530 less on a $10,000 investment. Thus, BSV performed worse than IXUS by 3.81% annually.
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