BSV vs. SCHA: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between BSV and SCHA? And which fund is better?

The expense ratio of BSV is 0.01 percentage points higher than SCHA’s (0.05% vs. 0.04%). BSV is mostly comprised of AAA bonds while SCHA has a high exposure to the healthcare sector. Overall, BSV has provided lower returns than SCHA over the past ten years.

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

Summary

BSV SCHA
Name Vanguard Short-Term Bond Index Fund ETF Shares Schwab U.S. Small-Cap ETF
Category Short-Term Bond Small Blend
Issuer Vanguard Schwab ETFs
AUM 67.71B 16.51B
Avg. Return 2.27% 12.62%
Div. Yield 1.48% 0.98%
Expense Ratio 0.05% 0.04%

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 Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.

BSV’s dividend yield is 0.50% higher than that of SCHA (1.48% vs. 0.98%). Also, BSV yielded on average 10.35% less per year over the past decade (2.27% vs. 12.62%). The expense ratio of BSV is 0.01 percentage points higher than SCHA’s (0.05% vs. 0.04%).

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.

SCHA - Holdings

SCHA Holdings Weight
AMC Entertainment Holdings Inc Class A 0.67%
Caesars Entertainment Inc 0.51%
Cloudflare Inc 0.48%
NovoCure Ltd 0.45%
Plug Power Inc 0.41%
10x Genomics Inc Ordinary Shares – Class A 0.34%
GameStop Corp Class A 0.28%
RH 0.27%
Penn National Gaming Inc 0.27%
Axon Enterprise Inc 0.27%

SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.

10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.

Risk Analysis

BSV SCHA
Mean Return 0.16 1.14
R-squared 78.38 82.26
Std. Deviation 1.33 18.68
Alpha 0.21 -4.65
Beta 0.38 1.25
Sharpe Ratio 0.98 0.7
Treynor Ratio 3.33 9.62

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

The Schwab U.S. Small-Cap ETF (SCHA) has a Treynor Ratio of 9.62 with a Beta of 1.25 and a Mean Return of 1.14. Its Alpha is -4.65 while SCHA’s Sharpe Ratio is 0.7. Furthermore, the fund has a Standard Deviation of 18.68 and a R-squared of 82.26.

BSV’s Mean Return is 0.98 points lower than that of SCHA and its R-squared is 3.88 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than SCHA. The Alpha and Beta of BSV are 4.86 points higher and 0.87 points lower than SCHA’s Alpha and Beta.

Performance

Annual Returns

BSV vs. SCHA - Annual Returns

Year BSV SCHA
2020 4.67% 19.35%
2019 4.92% 26.54%
2018 1.34% -11.75%
2017 1.2% 15.04%
2016 1.42% 19.88%
2015 0.92% -4.24%
2014 1.32% 6.53%
2013 0.17% 39.59%
2012 1.98% 18.24%
2011 3.04% -2.95%
2010 4.0% 28.31%

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 SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.

Portfolio Growth

BSV vs. SCHA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,294 2.27%
SCHA $10,000 $30,035 12.62%

A $10,000 investment in BSV would have resulted in a final balance of $12,294. This is a profit of $2,294 over 10 years and amounts to a compound annual growth rate (CAGR) of 2.27%.

With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.

BSV’s CAGR is 10.35 percentage points lower than that of SCHA and as a result, would have yielded $17,741 less on a $10,000 investment. Thus, BSV performed worse than SCHA by 10.35% annually.


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