The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between BSV and SCHF? And which fund is better?
The expense ratio of BSV is 0.01 percentage points lower than SCHF’s (0.05% vs. 0.06%). BSV is mostly comprised of AAA bonds while SCHF has a high exposure to the financial services sector. Overall, BSV has provided lower returns than SCHF over the past ten years.
In this article, we’ll compare BSV vs. SCHF. We’ll look at portfolio growth and annual returns, as well as at their performance and fund composition. Moreover, I’ll also discuss BSV’s and SCHF’s holdings, risk metrics, and industry exposure and examine how these affect their overall returns.
Summary
| BSV | SCHF | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | Schwab International Equity ETF |
| Category | Short-Term Bond | Foreign Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 67.71B | 26.99B |
| Avg. Return | 2.27% | 6.43% |
| Div. Yield | 1.48% | 2.16% |
| Expense Ratio | 0.05% | 0.06% |
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 International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.
BSV’s dividend yield is 0.68% lower than that of SCHF (1.48% vs. 2.16%). Also, BSV yielded on average 4.16% less per year over the past decade (2.27% vs. 6.43%). The expense ratio of BSV is 0.01 percentage points lower than SCHF’s (0.05% vs. 0.06%).
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.
| SCHF Holdings | Weight |
| Nestle SA | 1.66% |
| Samsung Electronics Co Ltd | 1.6% |
| ASML Holding NV | 1.29% |
| Roche Holding AG | 1.24% |
| Toyota Motor Corp | 1.02% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.93% |
| Novartis AG | 0.92% |
| Shopify Inc A | 0.78% |
| AstraZeneca PLC | 0.75% |
| SAP SE | 0.74% |
SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.
LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.
Risk Analysis
| BSV | SCHF | |
| Mean Return | 0.16 | 0.58 |
| R-squared | 78.38 | 98.16 |
| Std. Deviation | 1.33 | 15.08 |
| Alpha | 0.21 | 0.53 |
| Beta | 0.38 | 0.99 |
| Sharpe Ratio | 0.98 | 0.42 |
| Treynor Ratio | 3.33 | 5.39 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Beta of 0.38 with a Mean Return of 0.16 and a Standard Deviation of 1.33. Its R-squared is 78.38 while BSV’s Sharpe Ratio is 0.98. Furthermore, the fund has a Alpha of 0.21 and a Treynor Ratio of 3.33.
The Schwab International Equity ETF (SCHF) has a Treynor Ratio of 5.39 with a Mean Return of 0.58 and a Standard Deviation of 15.08. Its Beta is 0.99 while SCHF’s R-squared is 98.16. Furthermore, the fund has a Sharpe Ratio of 0.42 and a Alpha of 0.53.
BSV’s Mean Return is 0.42 points lower than that of SCHF and its R-squared is 19.78 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than SCHF. The Alpha and Beta of BSV are 0.32 points lower and 0.61 points lower than SCHF’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | SCHF |
| 2020 | 4.67% | 9.86% |
| 2019 | 4.92% | 22.15% |
| 2018 | 1.34% | -14.39% |
| 2017 | 1.2% | 25.83% |
| 2016 | 1.42% | 2.88% |
| 2015 | 0.92% | -2.44% |
| 2014 | 1.32% | -4.44% |
| 2013 | 0.17% | 20.03% |
| 2012 | 1.98% | 17.12% |
| 2011 | 3.04% | -12.32% |
| 2010 | 4.0% | 8.6% |
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 SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $12,294 | 2.27% |
| SCHF | $10,000 | $17,089 | 6.43% |
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 SCHF, the end total would have been $17,089. This equates to a $7,089 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.
BSV’s CAGR is 4.16 percentage points lower than that of SCHF and as a result, would have yielded $4,795 less on a $10,000 investment. Thus, BSV performed worse than SCHF by 4.16% annually.
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